Business: Gulf Oil's Painful Surgery

A giant pays dearly for past mistakes

Rumors have been swirling for months through business circles from Wall Street to Houston: Gulf Oil Corp., the nation's eighth largest industrial concern (sales last year: $17.8 billion), is in trouble. Though there is no question about the company's survival, it is in the midst of a painful struggle to overcome years of bad luck and fumbling management.

Squeezed for cash because of overinvestment and declining earnings, Gulfs chiefs have been wielding a heavy ax to cut costs, jettison losing properties and clear a path out of past mistakes. The company's fleet...

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