Chairman, president, and chief executive officer, Praxair
Born: 1953, in Oklahoma City, Oklahoma.
Education: Oklahoma State University, BS, 1975.
Family: Married Cindy (maiden name unknown).
Career: Conoco, 1975–1979, pipeline engineer; 1979–1990, executive assistant to the chairman, along with other positions including president and managing director of Conoco Ireland; DuPont Company, 1990–1994, vice president and general manager of titanium-dioxide business; 1994–1995, vice president and general manager of specialty-chemicals business; 1996–1997, vice president and general manager of Lycra business; 1997–1999, executive vice president; 1999–2000, COO; Praxair, 2000–, president, CEO, and chairman.
Address: Praxair, 39 Old Ridgebury Road, Danbury, Connecticut 06810-5113; http://www.praxair.com.
■ Dennis H. Reilley eventually became president, chief executive officer, and chairman of the board of directors of the Danbury, Connecticut–based Praxair, a global leader in the development of processes and technologies involving industrial gases. As of 2004 Praxair was the largest industrial-gases company in North and South America and one of the largest such companies worldwide. Praxair served a wide range of industries, including aerospace, chemicals, energy and refining, food and beverages, health care, refining, semiconductors, manufacturing, and primary metal fabrication.
Praxair was a global Fortune 500 company with 2003 revenues of $5.6 billion and a net income of $585 million. The company's primary products were atmospheric gases—such as oxygen, nitrogen, argon, and rare gases (produced when air is purified, compressed, cooled, distilled, and condensed)—and process and specialty gases—such as carbon dioxide, helium, hydrogen, semiconductor process gases, and acetylene (produced as by-products of chemical production or recovered from natural gas). Reilley oversaw the design, engineering, and construction of equipment that produced industrial gases for the internal use and the external sale of such processes within cryogenic and noncryogenic supply systems.
The company's Praxair Surface Technologies subsidiary applied high-temperature, wear-resistant, and corrosion-resistant metallic and ceramic coatings and powders to metal surfaces. These coatings and powders were supplied mainly to the aircraft, plastics, and primary-metals industries. The surface technologies segment of Praxair also provided aircraft-engine and airframe-component overhaul services.
A native of Oklahoma City, Oklahoma, Reilley received a bachelor's degree in finance from Oklahoma State University (OSU) in 1975. Reilley credited OSU with providing the academic background in business and executive management that he would need and make use of over the next 30 years.
Reilley held numerous earlier positions at the Wilmington, Delaware–based DuPont Company and its former energy subsidiary, Conoco (now called Conoco-Phillips). Reilley joined Conoco in 1975 where he served as a pipeline engineer until 1979, when he was promoted to executive assistant to the chairman. DuPont purchased Conoco in 1981, and Reilley continued to serve in a variety of positions in both upstream and downstream organizations, including as president and managing director of Conoco Ireland.
In 1989 Reilley transferred to DuPont's chemicals and specialty business. From 1990 to 1994 he served as vice president and general manager of its titanium-dioxide business. Between 1994 and 1995 Reilley held the position of vice president and general manager of specialty chemicals. In 1996 he was named vice president and general manager of the Lycra business. Reilley was named an executive vice president of DuPont in 1997 and chief operating officer in 1999, in which position he was responsible for the divisions of pigments and chemicals, specialty polymers, and nylon and polyester. In 2000 Reilley moved over to Praxair.
Reilley became president and chief executive officer of Praxair in March 2000. He assumed the additional title of chairman on December 1 of that year. Upon joining Praxair, Reilley strenuously promoted the "take or pay" contracts that the company signed with customers before building gas plants next to their factories. These agreements made up about 35 percent of the sales generated within Praxair. The strategy promoted by Reilley strengthened Praxair's focus on critical resources within geographic markets bearing the greatest potential for high-return growth.
Reilley's responsibilities as chief executive officer involved spending around three days a week visiting factories and customers. This approach—which Reilley offered as a countermeasure to the scandals involving corporate-executive misdeeds that had been recently exposed by the media—ensured Reilley's hands-on involvement with the day-to-day details of Praxair's businesses.
While spending a day talking with students at Oklahoma State University's first annual "CEO Day," sponsored by the College of Business Administration, the alumnus Reilley averred that all employers needed to be held to the highest ethical standards in order to dispel the negative impressions left by illegal corporate activities such as insider trading and fraud. Referring to the importance of chief executive officers operating with the greatest possible degree of integrity, Reilly said at the event, "The actions of a few have cast a shadow on everybody else. It's important that the rest of us not only do the right things but let people see that we're doing the right things. That's the only way that we're going to help rebuild the confidence that's been pulled away from the marketplace as a result of what's happened" (April 2003).
Reilley was heavily involved with improving efficiency at Praxair—an effort he sometimes called his "crusade." As of 2001 Reilley adopted the Six Sigma approach at the company, a management-directed, team-based, and expert-led program that he brought over from the DuPont Company. Six Sigma measures quality and strives for near perfection—specifically, a process must not produce more than 3.4 defects per million situations. Reilley emphasized the program's focus on helping employees recognize and avoid behavior that put them at risk (and sometimes in danger of injury and death). Such actions played a large role in the 15 percent improvement in Praxair's worldwide 2002 recordable injury rate as compared to the rate of 2001. Six Sigma promotes strong compliance to policies and procedures in order to avoid even the potential for injury.
As of February 2003 the prevalence of the Six Sigma methodology in Praxair businesses grew to more than 800 projects throughout the global organization. Savings from Six Sigma activities totaled almost $34 million in 2002, with additional savings expected by Reilley in 2003. Reilley told his employees that many career advancement opportunities within Praxair would go to the employees who not only performed best but also demonstrated success using Six Sigma methodologies.
Reilley was well known within the gas industry as a chief executive officer who constantly pushed for improvements in returns on capital and investments. In 2002 Praxair had $498 million in capital expenditures and $548 million in net income—a decline of about 29 percent from 2000. Yet, the after-tax return on capital climbed, as Reilley noted, approximately 7 percent between 2000 and 2002. Reilley demanded a return on investment of at least 15 percent over the life of any major project.
Priorities for Reilley included developing the petrochemicals and electronics business in China. Worldwide he made the development of hydrogen plants for refineries, electronics, and health care a major priority. He maintained a strong policy of investing in capital for industrial gases, health care, and electronics in order to increase revenues. The Reilley strategy provided a total return of 14.2 percent between 1998 and 2002—a score that ranked Praxair first in all companies within the chemical industry.
As of the end of 2003 Reilley believed that Praxair was on track to continue to achieve improved performance and profitability, thanks to the correct combination of growth platforms and core businesses; products, services, and technologies; and geographic emphasis and global potential. He promised to continue to emphasize earnings growth and return on capital and cash flow. With new opportunities for expansion, strong performance in base businesses, and an active employee team, Reilley saw continued prosperity for Praxair and increased value for its shareholders. Praxair was the only major, fully integrated industrial-gas company with national coverage in the United States, and Reilley took full advantage of its position in sustaining its success.
Reilley was a member of the U.S. Department of Energy's Electricity Advisory Board as well as the boards of directors of the utility holding company Entergy Corporation and the oil and gas exploration and development company Marathon Oil Company. He was a chairman of the American Chemistry Council, formerly called the Chemical Manufacturers Association.
See also entry on Praxair, Inc. in International Directory of Company Histories .
Mitchell, Jim, "CEO Day Wins Applause from Students and Alumni," College of Business Administration, Oklahoma State University, April 2003, http://www.bus.okstate.edu/cba/pressreleases/Spring2003/ceo_day_review.htm .
—William Arthur Atkins