Enron - Early History

Early History

Enron's predecessor was the Northern Natural Gas Company, which was formed during 1932, in Omaha, Nebraska. It was reorganized during 1979 as the main subsidiary of a holding company, InterNorth which was a diversified energy and energy related products company. Internorth was a major business for natural gas production, transmission and marketing as well as for natural gas liquids and was an innovator in the plastics industry. It owned the company Peak Antifreeze and developed EVAL resins for food packaging. During 1985, it bought the smaller and less diversified Houston Natural Gas company.

The company initially named itself "HNG/InterNorth Inc.", even though InterNorth was the nominal parent. It built a large and lavish headquarters complex with pink marble in Omaha (dubbed locally as the "Pink Palace"), that was later sold to Physicians Mutual corporation. However, the departure of ex-InterNorth and first CEO of Enron Corp Samuel Segnar six months after the merger allowed former HNG CEO Kenneth Lay to become the next CEO of the newly merged company. Lay soon relocated the company's headquarters to Houston (after promising to keep it in Omaha) and began to change the business. Lay and his secretary, Nancy McNeil, originally selected the name "Enteron" (possibly spelled in "camelcase" as "EnterOn"), but, when informed that the term approximated a Greek word referring to the intestines, the name was quickly abbreviated to Enron. The final name was decided upon only after business cards, stationery, and other items had been printed reading "Enteron". Enron's "crooked E" logo was designed during the mid-1990s by the late American graphic designer Paul Rand. Rand's original design included one of the elements of the E in yellow which disappeared when copied or faxed. This was quickly replaced by a green element. Almost immediately after the relocation to Houston, Enron began selling major assets such as its chemicals division Northern PetroChemicals, accepted silent partners in Enron CoGeneration, Northern Border Pipeline and Transwestern Pipeline, and became a less diversified company. Early financial analysts said Enron was accumulating great debt and the sale of major operations would not solve the problem.