We are making a number of significant organizational changes. These change=
are intended to accomplish four key objectives:
First, we need to realign all our wholesale businesses around the successfu=
business model developed over the last decade in North America and Europe. =
This model relies on extensive physical and transactional networks built=20
around a relatively small strategic asset position.
Second, we need to significantly streamline corporate reporting=20
relationships. Particularly with Joe Sutton=01,s departure, the ability to=
directly manage the day-to-day activities of 15 independent business units=
has become increasingly difficult.
Third, we need to accomplish these changes without, in any way, compromisin=
the ongoing profitability of all our businesses and without delaying or=20
hindering our effort to monetize a significant portion of our lower-yieldin=
And fourth, as always, we need to take advantage of the reorganization to=
redeploy our talent into our highest value opportunities.
ENRON WHOLESALE SERVICES
Today, we are forming Enron Wholesale Services (EWS) which will consolidate=
our global wholesale businesses. The closer alignment of our wholesale=20
businesses will accomplish the following: (1) enhanced communication and=20
coordination across business units, (2) more rapid deployment of people to=
higher valued opportunities, (3) more effective prioritization of=20
opportunities across the wholesale business, and (4) more rapid extension o=
Enron=01,s wholesale business model and capabilities into new industries an=
Enron Wholesale Services will include our current North American, European=
(including Japan and Australia), Global Markets, and Industrial Markets=20
operations, and will be expanded to include Enron=01,s Net Works business u=
as well as a new unit =01) Enron Global Assets. In addition, Enron=01,s me=
businesses outside of North America and Europe will be integrated into this=
new structure as described below.
Mark Frevert, currently Chairman of each of our wholesale units, will assum=
the role of Chairman and CEO of Enron Wholesale Services. Greg Whalley,=20
currently Chairman and CEO of Enron Net Works, will join Mark in the Office=
of the Chairman as President and Chief Operating Officer.
Providing further impetus for these organizational changes, several of our=
international business unit leaders have elected to move into new leadershi=
Rebecca McDonald, currently CEO of Enron APACHI, will join EWS as President=
and CEO of Enron Global Assets. Enron Global Assets will have responsibilit=
for managing all of Enron=01,s existing energy asset portfolio outside of N=
America and Europe. Joining Rebecca in the Office of the Chairman as COO=
will be Jim Hughes, currently COO of Enron APACHI. Rebecca and Jim will=20
report to the EWS Office of the Chairman.
Sanjay Bhatnagar, currently CEO of Enron India, has joined EBS as CEO for t=
Middle East and Asia region. Sanjay will be responsible for building our=
broadband business in this region and the current EBS team in this region=
will report to Sanjay. In this role, Sanjay will report to the EBS office =
the Chairman. In addition, Sanjay will continue to remain responsible for=
Enron=01,s wholesale energy business in India and will transition this busi=
into Enron Global Assets in the near future.
Diomedes Christodoulou, currently Co-CEO of Enron South America, has joined=
EBS as Chief Commercial Officer. Diomedes will be located in London and wi=
focus his origination activities on global opportunities, with near term=20
attention to the wholesale and enterprise sectors. Diomedes will report to=
the EBS Office of the Chairman.
Jim Bannantine, currently Co-CEO of Enron South America, will be joining EE=
to lead EES=01, commercial efforts outside North America and Europe. In or=
to ensure a smooth transition for our South American businesses and to=20
facilitate our asset sales activities, Jim will remain in South America for=
at least the next several months and continue to serve as CEO of Enron Sout=
America. Throughout the transition, Jim will report to Cliff Baxter and to=
the Office of the Chairman of Enron Wholesale Services. Following the=20
transition, Jim will join EES.
In addition to these changes in our international asset operations=20
activities, we are making the following changes in our merchant wholesale=
businesses and the commercial support functions:
Enron Net Works
Louise Kitchen will assume Greg=01,s previous responsibilities as President=
CEO of Enron Net Works, reporting into Mark and Greg. =20
Concurrent with the transfer to Enron Global Assets of responsibility for=
operating Enron=01,s South and Central America asset base, all trading,=20
marketing, and new asset development activities in these regions will repor=
into a new entity, Enron Americas. Enron Americas will have responsibility=
for all wholesale merchant businesses across North, Central and South=20
America. Dave Delainey, President and CEO, and John Lavorato, Chief=20
Operating Officer will comprise the Office of the Chairman for Enron=20
The Enron Europe organization, which includes Enron=01,s businesses in Aust=
and Japan, and Enron Metals, remains unchanged under the leadership of John=
Sherriff, President and CEO, and Michael Brown, Chief Operating Officer.
Enron Global Markets
Enron Global Markets, under the leadership of Mike McConnell, President and=
CEO, and Jeff Shankman, Chief Operating Officer, will continue to have=20
responsibility for Enron=01,s Middle East and LNG operations. With the=20
exception of Ecoelectrica in Puerto Rico, all operating power plants and=20
associated personnel in the Caribbean and Central America will transfer to=
Enron Global Assets. Enron Global Markets will also continue to manage the=
commodity businesses in crude and products, coal, weather, insurance,=20
equities, interest rates, foreign exchange, and agricultural products.
Enron Industrial Markets
Enron Industrial Markets=01, organization, under the leadership of Jeff McM=
President & CEO, and Ray Bowen, Chief Operating Officer, remains unchanged.
Commercial Support for EWS
The commercial support functions for EWS will remain with, and be managed b=
the individual business units. We are creating no incremental overhead in=
the creation of EWS, and in fact hope to reduce our operating costs by more=
efficient utilization and sharing of resources across EWS.
To this end we have asked several people to take on an expanded role across=
EWS in addition to their ongoing roles within their business units. These=
newly defined roles are as follows:
Mid and Back Office Operations =01) Sally Beck will lead Mid and Back Offic=
Operations across EWS. These services will become part of Enron Net Works,=
with Sally reporting to Louise Kitchen and Rick Causey, Executive Vice=20
President and Chief Accounting Officer. This alignment creates a coordinat=
services organization with IT and e-commerce platforms to support the=20
wholesale businesses and to maximize opportunities to commercialize these=
services. Mid and Back Office services for all commercial activities will=
continue to be organized with dedicated operations controllers responsible=
for specific commodities and/or geographic locations.
Legal =01) Mark Haedicke will serve in the role of General Counsel for EWS.
Regulatory and Government Affairs =01) This function will remain organized =
regional basis. Rick Shapiro will support all EWS businesses operating in=
the Americas, and Mark Schroeder, who is based in London, will support all=
European and Eastern Hemisphere operations. Rick and Mark will also contin=
to support all other Enron businesses operating in their respective regions=
and will continue to report to Steve Kean, Executive Vice President and Chi=
Public Relations =01) This function is also organized primarily on a region=
basis. Eric Thode will have responsibility for North American activity,=20
Enron Net Works, and Enron Industrial Markets. Jackie Gentle will continue=
in her role for Enron Europe (including Japan and Australia) and John Amble=
will have responsibility for activity outside North America and Europe as=
well as providing support for Enron Global Markets and Enron Global Assets.=
These individuals will also continue to have a split reporting relationship=
to Mark Palmer, Vice President of Communications.
Business Analysis and Reporting =01) Wes Colwell will expand his role to co=
EWS reporting in addition to his current role in North America.
Attached for your review is an organization chart for Enron Wholesale=20
Services which summarizes the changes described here. As this organization=
continues to evolve we will keep you informed of any additional changes.
ENRON GLOBAL EXPLORATION AND PRODUCTION
AND ENRON WIND
As part of our company-wide initiative to examine our assets and investmen=
around the world, we are considering a variety of options with respect to=
EGEP and EWC. As a consequence, we are putting these businesses under Clif=
Baxter=01,s direction. Jeff Sherrick, CEO of EGEP, and Jim Noles, CEO of E=
Wind, will report to Cliff.
We are consolidating the corporate staff functions: Human Resources,=20
Government Affairs, Public Relations/Communications and Administration. In=
that regard, Cindy Olson, Executive Vice President of Human Resources and=
Community Relations, will report to Steve Kean, Executive Vice President an=
Chief of Staff.
In light of the increased leadership opportunities created by Enron=01,s=
growth, the Executive Committee will be expanded to include more of our=20
business unit leaders. The primary role of this committee will continue to=
be the communication of relevant information across Enron=01,s businesses a=
the coordination of activities across those businesses. We will also be=20
drawing on this group to lead company-wide initiatives such as the=20
performance review process and evaluation and creation of new businesses. =
The Executive Committee membership is shown on the attached list.
We are also forming a new committee =01) the Enron Corporate Policy Commit=
This group will be responsible for overall corporate policy, personnel=20
management policy and corporate strategy. The Enron Corporate Policy=20
Committee membership is also shown on the attached list.
We are confident that these changes will align our talent and our capital =
our highest return opportunities. Please join us in congratulating and=20
supporting all of these individuals in their new roles.