Tappan to Leave Fluor; McCraw Is Successor

David S. Tappan, who led Irvine-based Fluor Corp.’s return to profitability, will step down as chief executive of the giant engineering and construction firm at the end of the year, the company said Wednesday.

As expected, Fluor President Leslie G. McCraw, 54, will succeed Tappan, 67, as chief executive of the concern, which is Orange County’s largest publicly held company. McCraw, who has played a key role in Fluor’s aggressive diversification, will also become vice chairman next year and will succeed Tappan as chairman at the end of 1990.

Vincent L. Kontny, 52, will replace McCraw as president of Fluor Corp. while also retaining his current position as president and chief executive of Fluor Daniel, the parent company’s principal subsidiary.

Tappan took over as chairman and chief executive in 1984 and had planned to retire in 1987. At the request of the board of directors, Tappan postponed retirement to oversee an overhaul of the firm and help it recover from a painful slump. Tappan said Wednesday that he feels he has accomplished that mission.

“I have had quite a list of ‘must dos’ and now it is down to zero,” Tappan said Wednesday.

Under Tappan’s leadership, Fluor achieved a major turnaround. In fiscal 1988, Fluor posted $56.4 million in earnings, a big rebound from the $633.3-million loss that it reported in 1985. And for the first nine months of fiscal 1989, Fluor posted net income of $79.4 million, up from $32.8 million during the same period a year earlier.

When Tappan became chairman and chief executive upon the death of J. Robert Fluor, the company’s founder, he took over a company whose chief business, building refineries and petrochemical plants, was caught in a worldwide recession. Moreover, the company had invested heavily in coal and metals just as prices for those commodities were at their apex and about to dive.

“He was faced with an incredibly difficult situation, having the company’s two major businesses, metals and engineering, crashing at the same time,” recalled Deborah Thielsch, an analyst at First Boston.

Tappan focused on Fluor’s main business of engineering and construction and sold off or revamped the money-losing natural resources operations. He managed to sell Fluor’s gold and zinc businesses at what analysts considered premium prices.