Halliburton had signaled that action was pending when thedivisions showed a third quarter decline of 21% in constructionrevenues. "They already said they were going to make some changesin their E&C business," says a local analyst. "What we did notknow was the extent to which they would be making cuts and thecharges they would be taking."

Halliburton's traditional and energy-related E&C businesswill be managed by Kellogg Brown & Root. It faces "challenges."It has a shrinking customer base, labor problems overseas anddifficult relationships with key clients in a viciously competitiveenvironment.

Halliburton officials say the restructuring will be completedduring first quarter 2001. Despite the E&C problems, thecompany hopes to meet or exceed earnings expectations.The oil andgas giant got into the construction business in 1962 when it boughtBrown & Root. It had expanded with the purchase of DresserIndustries, when it combined Dresser subsidiary M.W. Kellogg withBrown & Root. Dresser is now being sold.