Webber Oil Company

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Webber Oil Company

700 Main Street
Bangor, Maine 04401-6800
U.S.A.
Telephone: (207) 942-5505
Toll Free: (800) 238-5505
Fax: (207) 941-9597
Web site: http://www.webenergy.com

Private Company
Incorporated: 1935
Employees: 700
Sales: $203 million (2002 est.)
NAIC: 454311 Heating Oil Dealers

Webber Oil Company, based in Bangor, Maine, is a major wholesaler of home heating fuels and gasoline in Maine and New Hampshire. In addition to providing oil and propane for home heating needs, the privately held company provides a variety of other services, including installation of heating equipment, rental of space heaters and hot water heaters, servicing of heating equipment and fuel tanks, and a remote monitoring service that ensures a home heating system is operational while the owners are away—an important consideration during frigid Maine winters. Webber also operates 16 gas stations combined with convenience stores.

Birth of Company in 1935

Webber was founded in 1935 by Bangor businessman Alburney E. "Allie" Webber, owner of Webber Motor Company. To run his new fuel venture he installed Frank Smart, whom he had hired three years earlier to serve as station manager for Webber Motor. At first the home fuel oil company consisted of four employees and two delivery trucks. It served as a distributor for Colonial Beacon Oil Company, owned by Standard Oil Company of New Jersey, which used it to distribute its Esso gasoline and heating oil to New England. Colonial Beacon would later become Humble Oil and eventually the Humble and Esso names were dropped in favor of Exxon. As a result of its long history with Exxon's predecessors, Webber became one of the largest Exxon distributors in the United States. In the early years, in the midst of the Great Depression, however, Webber was content to simply survive. By 1940 the company employed just 14 people to serve 20 gasoline accounts and 250 fuel oil customers. Although the economy rebounded during World War II, Webber was unable to grow because the government restricted the sale of petroleum products due to the war effort. It was not until the postwar years, and the resulting economic boom, that Webber was able to expand its fuel oil business as well as to start opening gas stations. The first major step was taken in 1948 with the company's first major acquisition, the purchase of Staples Oil Company, which not only added new fuel oil customers but also took Webber beyond Bangor into the community of Pittsfield, Maine. Another significant development during the decade was the creation of Webber Tanks, a subsidiary that in 1949 built a 32-million-gallon-deep water terminal located in Bucksport, Maine. The facility was capable of storing large amounts of heating fuel and gasoline, as well as kerosene, diesel fuel, and later jet fuel following the construction of jetports in Bangor and Portland, Maine.

In 1955 Alburney Webber died, but Smart continued to lead the company. The decade was also marked by the rise of the interstate highway system, which spread through Maine and helped to further spur Webber's gasoline business. However, it was the fuel oil business on which Smart chose to concentrate over the next decade. In 1960 the company established its first non-petroleum business, launching Webber Supply Inc., a wholesale heating supply house. In 1965 Webber's diversification efforts went even further with the acquisition of an insurance company, Sargent, Kennedy & Adams. By the middle of the decade, Webber operated in four Maine counties, with 85 gas stations, 16 heating oil trucks, 5,300 heating oil customers, and 110 employees. Expansion continued in 1968 when Webber acquired Brake Service & Parts Inc. to service its growing fleet of trucks and trailers. It was also in the 1960s, with the death of Smart in 1969, that the company underwent a change in management. Danville Webber, son of the company's founder, became chief executive officer, and a relation by marriage, Larry K. Mahaney, assumed the presidency. Of the two, Mahaney would prove to have the more lasting impact on the growth of the business.

Mahaney was born in 1930 in northern Maine's Aroostock County, and like many raised during the Depression Era grew up poor but determined to become a success. To earn money he pulled mustard weeds in potato fields, and by his own account shined shoes for 10 cents a shoe, set "bowling pins for 10 cents a string, and caddied nine holes of golf for 25 cents." Mahaney was able to attend the University of Maine, where he played basketball and graduated in 1951 with a bachelor's degree in economics. He then served a two-year stint in the Air Force before returning to school to earn a master's degree in education. For several years Mahaney taught high school and coached athletics. He became involved with Webber through his marriage to one of the founder's granddaughters, Louise "Jackie" Frost. In 1962 Mahaney joined Webber as the manager of the heating oil division and director of advertising and public relations. Mahaney's naturally ambitious nature was further sparked by a desire to prove that his position in the company was warranted by his abilities rather than simple nepotism. He quickly made his mark by taking note that all of Webber's fuel oil trucks had "Esso" stenciled on the side. Not only had Esso exited the heating oil business, Mahaney questioned why Webber trucks should promote anything but the Webber brand. He hired a public relations firm to create a logo, which he then had stenciled on the side of the delivery trucks. It was Mahaney, and his need to prove himself, that spurred Webber to the next level of growth once he assumed leadership of the family business.

Modernizing Operations: 1970s

As Mahaney had done with Webber's approach to marketing, he also introduced modern management techniques to the company and sought even further diversification. He looked to real estate investments, some of which he pursued on a private basis. In 1971 Webber tried combining its gasoline operations with a car wash, a popular concept elsewhere in the country, opening the Union Street Car Wash. It was also during the 1970s that the Exxon name replaced Esso and Humble, and Webber established an association with Sunoco. Of far more importance in the 1970s was how Webber reacted to the Arab oil embargo of the early 1970s. Out of necessity, the company secured new sources of energy and increased its storage capacity. As a result, Webber emerged from the crisis in a far stronger position and poised for even greater growth in the 1980s.

Webber expanded its operations from Bangor into southern Maine and in 1980 became involved out of state for the first time, acquiring New York-based Parish Oil, which distributed Sunoco gasoline to upstate New York communities. All told, the company completed 13 acquisitions during the 1980s, adding to all facets of its business: heating oil, gasoline, and real estate. Webber also displayed a spirit of innovation during the decade. In 1988 the company launched its Presidential Protection Plan, which for an annual fee provided heating oil customers with routine and emergency service of their heating system. It was the first service plan of its kind to be introduced in Maine. Also during the 1980s, a fight broke out over control of the family business. In 1983, according to the Bangor Daily News, CEO Danville Webber tried to oust Mahaney and failed when a judge ruled against him. Webber quit the company in 1984. Two years later Mahaney solidified his position when Webber and his daughters sold out to Mahaney's wife, motherinlaw, and sister-in-law.

The 1990s saw Webber continue to grow by acquisition. The largest single purchase in the company's history occurred in 1993 when Webber added six Agway oil subsidiaries. Two of the businesses were located in Maine and the other four in New Hampshire. Not only did the transaction bolster Webber's market share in Maine, it expanded the company's retail fuel business into the new market of New Hampshire. Because of stricter environmental regulations, Webber also invested in upgrading its infrastructure to provide greater environmental security. To remain competitive Webber invested in computer technology to upgrade its infrastructure. The company was also an early proponent of the Internet, launching a web page in 1996. Many of the investments Webber made during this period would be of little help in 1998 when New England suffered a severe ice storm, "The Storm of the Century," that downed power lines and, because of the lack of electricity, rendered useless all of Webber's computer technology and radio communications. Nevertheless, Webber trucks, in spite of felled trees and other damage caused by the storm, were able to deliver crucial supplies of heating oil to customers. Webber also proved to be a good neighbor, donating fuel to heat emergency shelters housing residents forced to leave their homes.

Succession Difficulties Surfacing in 1990s

In the 1990s an attempt to groom a replacement for Mahaney failed to work. James Mullen was brought in as an executive vice-president in 1991, following an 18-year career in banking. While at Key Bank of Maine, Mullen had ascended to the rank of president and chief operating officer. He succeeded Mahaney as Webber's president in February 1995 but a year later, in May 1996, Mullen announced that he was leaving the company due to philosophical differences with ownership. Both Mahaney and Mullen insisted that the break was amicable. The only explanation that Mahaney offered for the departure was related to Mullen's background with Key Bank: "Coming from a publicly owned company, the philosophy on the direction you go and the handling of people may be different than the philosophy or how you handle people in a privately owned company." After Mahaney assumed the presidency once again, his own ability to handle people came into question and would engender another unpleasant public spat.

Company Perspectives:

Whatever the future energy needs of our customers are, Webber will be there to keep them comfortable and secure.

In 1999 a former Webber manager, Hubert E. Saunders, filed a civil suit against the company because he claimed he was the victim of discrimination, fired in October 1997 after he informed Mahaney that he had prostate cancer. Saunders had come to Webber as part of the 1993 acquisition of an Agway Petroleum facility in Auburn, Maine, where he had served as a manager. He worked for over four years for Webber when in September 1997 Agway offered him a position. Webber countered with a promotion that would make Saunders a Webber vice-president. Saunders stayed. However, a short time later he told Mahaney that he had been diagnosed with cancer and was hoping to take a new kind of radiation therapy. He said he would need to take some sick days for the treatment. According to Saunders's lawsuit, Mahaney told him, "No more sick days because that's all the sick days you get." A week later, according to a December 1999 Bangor Daily News article, he was fired by a human resources executive who said, "Mahaney wants you out of the company, no debate, no negotiation."

The suit worked its way through the court system. In November 2000 Webber attorneys sought a summary judgment but were denied by a federal magistrate judge, who allowed the matter to go before a jury. During the course of the hearing, more facts about the relationship between Saunders and Mahaney emerged. According to the Bangor Daily News, "On October 21, 1997, the two came into contact again during a meeting, and Mahaney reportedly became angered when Saunders commented about how much harder it was to manage subsidiaries and people than it was 30 years ago." Although Saunders said that he did not intend to insult Mahaney, he later apologized. The next day he was fired. Additional information surfaced in May 2001 when the case finally went to a jury trial. On the second day of the trial the 71-year-old Mahaney took the stand and maintained that Saunders's remark at the October meeting was an allusion to his age and questioned his ability to run Webber. After Mahaney was on the stand for some two hours, the judge called for a morning recess, but Mahaney did not retake the stand nor did the jury return. The two sides reached a settlement for an undisclosed amount.

Mahaney continued to head Webber into the early years of the new century. Although he was reported to be preparing to retire at the end of 2001, two years later he remained still very much involved in the management of the company.

Key Dates:

1935:: Company is formed.
1948:: Staples Oil Company is acquired.
1955:: Founder Alburney E. "Allie" Webber dies.
1969:: Larry Mahaney becomes president.
1993:: Assets of Agway Petroleum are acquired.
1999:: Former Webber manager files an age discrimination lawsuit, which is eventually settled.