re refineries and over 1,000 petrol stations. Their retail division is one of the nation’s largest operators of company-controlled convenience stores. Annually, they sell four billion gallons of retail transportation in fuels, primarily the “76” brand, and over two billion in merchandise at their “Circle K” convenience stores.According to the Economist Magazine dated May 1997, they believe that, “Tosco has been demonstrating across America what bigger companies in the oil industry thought impossible: that there is money to be made out of refining.” Bayway’s east coast refinery, built in 1908, looks like a sad relic of dying industry. Tosco has completely turned things around. What looked like a loss-making operation turned into a highly profitable one. Tosco has a number of strategies to account for their success. They believe that minor improvements can have a big impact on profits. For example, Tosco buys crude oil a few cents cheaper than other companies, which keeps its inventories a little lower, and it’s manufacturing costs a fraction tighter. Another trick is to buy refineries at knock down prices. They bought Bayway at $175 million and BP’s two refineries together at $75 million. These prices are not much compared to the several billions needed to build a refinery. This reflects the bargaining skills of Tosco’s boss Thomas O’ Malley who believes, “Greed is good.” One of their biggest deals was in 1996, when Tosco acquired the Avon Refinery near Martinez, CA.Tosco began growing rapidly. Quickly purchasing one refinery after another. Their hastiness resulted in deadly results. They had no guidelines to follow. Each refinery was operating under its own policies and procedures. During an interview conducted with John Van Sluyters, Chairman of the Product Quality Committee, he states that, “ Uniformity in standard operating proc...
