A BRIEF HISTORY OF THE GUNDERSON OIL COMPANY

"A BRIEF HISTORY OF THE GUNDERSON OIL COMPANY

By Charles K. Gunderson, PE (ret.)

Carroll Gunderson moved to Grants from Laguna in February of 1928.  He purchased a 1/3 interest in the Bond Sargent Company which was founded in 1915.  He became the General Manager of the mercantile establishment.  The company had built a general store at the corner of First and Santa Fe Avenues after purchasing a rather large quantity of land from the Santa Fe Railway.  This land later became downtown Grants, extending from Fifth Street on the West to Nimitz Drive on the East.

In 1928, Calvin Coolidge was president of the U. S. and the economy was good.  World War I ended in 1918 and the postwar years were prosperous.  Grants at that time had a population of about 600.  The economy was nearly all agriculture.  Many large flocks of sheep were being raised in the vicinity, and the cattle industry was growing.

In 1928, Grants had no paved streets.  Santa Fe Avenue was a gravel-based dusty and rough road.  There were just a few business buildings, and lots of space in between.  The center of commerce in town was the Santa Fe depot.  Nearly all incoming merchandise and people came via train.  The roads were bad and trucks were small.  There was no water system, sewer system, electric system, natural gas, or telephone.

In the day-to-day operation of the mercantile store, it became immediately obvious that there was a market for petroleum products.  Gunderson sought out the Standard Oil Company of California and signed a contract with them to become a “Wholesale Dealer” or consignee in February of 1928.

The first need was for kerosene for use in lamps.  Automobiles and small trucks soon appeared on the scene, creating a need for gasoline; white gas at first, and soon afterward octane enhancers created “bronze” because of the gold color and “Ethyl” which was red and named because DuPont patented tetraethyl lead as an octane improver.

Gunderson chose the consigned product arrangement because of the then-staggering capital requirements to buy the necessary inventory and provide the facilities for distribution.  This arrangement continued until 1981, at which time the company was converted to a Jobbership, in which the jobber builds and owns the facilities and purchases the inventory for resale.

The first product received was kerosene and “white” (unleaded) gasoline.  It was shipped in fat iron barrels via rail and unloaded on a wagon pulled by a team of horses which moved it to a warehouse.  As the gallonage increased, Standard built a small tank farm and warehouse at the site of the present Checker Auto store.  The accounting was handled in the office of the general store.

In 1929, Gunderson had an engineering firm plat the downtown area, and this was filed with the County Clerk of Valencia County in Los Lunas.  The plat designated streets and alleys and defined the individual blocks of land.

There was no water system in Grants.  The Santa Fe railroad would bring a tank car of water from Belen and park it at the depot siding every other day, and everyone helped themselves.  Gunderson encouraged Mr. R. O. Burney to build a water system using the streets and alleys as right-of-way for the distribution lines.  The entire area was located on a lava flow, so it was difficult to dig ditches.  To prevent freezing, Mr. Burney covered the lines with abundant cinders from the nearby railroad coaling facility, and that is the reason the downtown alleys were higher than the surrounding areas.  Mr. Burney drilled a well, installed a pump and tank, and the city had running water.

In 1929, Gunderson borrowed money and contracted with the Fairbanks Morse Company of Kansas City to build a diesel electric plant.  The engine and building were located at the present site of the Continental Divide CoOp offices on High Street.  For the first time, adequate electric power was available to residents of Grants.  The plant was sold to the Inland Utilities Co. of Kansas City shortly thereafter.  In 1947, they sold to the Continental Divide Electric CoOp.

In 1929, Gunderson was instrumental as a member of the local school board in the construction of a high school which was completed that year.  It is now the Cíbola County complex.

The 1926 construction of the Breece Lumber Co. railroad to the Zuni Mountains and the 1928 completion of the Bluewater Dam solidified and diversified the economy of the area.

The 1930s were deep depression days after the stock market plunge of 1929.  Highway traffic consisted mainly of “Okies,” which was the reference term for travelers from the dust bowl en route to California to find jobs in the agricultural areas of that state.  They loaded all of their worldly goods on top of their old cars and began the long journey with little but faith and a few dollars.  Gasoline was fifteen to twenty-five cents a gallon, and they would rarely fill up.  One dollar purchases were common.  Most stations, including ours, used the visible bowl pumps that held ten gallons in a glass bowl high on the cabinet in order that they would gravity-flow into vehicles.  No electric power was necessary.  If someone needed fifteen gallons, you released the ten gallons in the bowl and manually pumped it up and released another five.  It was lots of work and very slow.  Credit cards were rare and required a manual written form with three carbon copies.

The highway became Route 66 and was slowly improved.  The road nearly always followed the railroad, as cars and trucks were unreliable and travelers often needed a ride.  It was gravel and dirt from Grants to Suwanee, which was a point near the present exit of NM 6 from I-40.  At that point, the road was paved to Los Lunas and on to Albuquerque.  The bridge at Rio Puerco was constructed in 1933 and the “cutoff” was built, allowing a direct route to Albuquerque, reducing the trip by 25 miles.  Petroleum business during these years was minimal and was a small adjunct to the mercantile business.

In 1939, the company name was changed to Bond Gunderson Co.  About 1940, several Arizona growers became interested in the Bluewater valley for the production of vegetables.  At the time, carrots were marketed with the tops attached, making a striking display of green and orange.  There was adequate underground water, and power costs were moderate.  The Grants growing season and the combination of warm days and cool nights produced a very large bushy green top, and the season fell between the Arizona and California peaks, so the growers could get a premium price.  For many summers during and after World War II, the local carrot season boomed.  The Gunderson Company built and leased several ironclad carrot packing sheds along the railroad.  A box factory and an ice plant furnished the needs of all the growers.

One of the windfalls of the carrot business was the fact that diesel fuel was used by the growers as a weed killer.  We sold hundreds of thousands of gallons to the industry.

This industry plus the war (WWII 1941-1945) greatly increased the economic base of the area.  Goods were scarce and rationed.  The Gunderson organization purchased four of their competitors in Grants, mainly for the inventories in these stores.  The buildings and real estate became part of the holdings of the company.  During the years immediately following the war, some of the departments of the business became unprofitable and were discontinued or moved.  The grocery stores were liquidated, as were the clothing and shoe departments.  The original mercantile store became a remodeled modern hardware outlet with an adjacent lumberyard and building material building.  The one department that continued to increase in sales and became a more valuable adjunct to the overall operation was the petroleum department that prospered as a result of the Chevron brand label and good and efficient management.

The petroleum volume increases immediately after WWII prompted the Chevron management to seek a larger site for the bulk station.  Gunderson knew of a new industrial area developing in the Village of Milan, adjacent to Grants on the Northwest.  Chevron purchased five acres of what was to become Airport Road, and built a modern tank farm and warehouse.  This site was active until the transition to a Jobbership in 1981, and is now the Milan Municipal swimming pool.

Carroll and Frieda Gunderson had two sons, Charles (Bud) and Raymond (1928-1975).  Both sons graduated from the University of New Mexico.

In 1947, Carroll, Bud, and Ray Gunderson purchased the ½ interest in the corporation from the Bond family of Albuquerque.  This move made the company a closely held family corporation, headquartered in Grants.

In the 1945-1950 era, there was a period of rapid growth, with service-men and -women returning home.  Expansion was everywhere.  Gunderson responded to this expansion with the gift of land to the Catholic Church for a community center and later the bargain sale of land for a new church and parochial school.  He sold land at a very low price to the school board, and they in turn built a new high school complex on Mountain Road and Second Street.  His contact with a wealthy mining executive,  Vernon Taylor, resulted in the construction of the Mother Whiteside Memorial Library.  He sold land to the Methodist Church and the Presbyterian Church at bargain prices in order that they could build new facilities.

In 1947, Carroll Gunderson and other progressive citizens obtained a charter for the Grants State Bank.  This was the only bank in western Valencia County at that time.

In the early 1950s, the company operated a hardware store and a furniture store in Grants, and the Chevron distributorship in Milan.  In 1957, the company moved the building materials warehouse from Santa Fe Avenue to a site at 417 North First and built a new and modern building which housed the Grants Post Office for many years.  Shortly thereafter, the company contracted with a supermarket named Barber's and built a facility for them at the East end of the block.  Before that was completed, they began construction of the First National Bank of Grants and completed the strip center with a variety store named Wacker's.  The building materials warehouse on First Street became the Furniture Mart and was operated by us at that location for many years.  It now had been leased to others and is known as the “Furniture Zone.”  The hardware store was liquidated in 1965.  The First and Santa Fe building became the Furniture Mart until it was demolished in September of 1991.

In 1950, a longtime customer, Paddy Martinez, brought a carton of rocks to Mr. Gunderson.  He was a Navajo Indian who lived near Haystack Mountain in Prewitt.  He said that he had found the rocks near his hogan on Santa Fe Railroad land and that it was uranium ore that was very much in demand.  He had seen and talked with prospectors while waiting for a bus at the Yucca Hotel, and they told him of the yellow-colored rock for which the U. S. government would pay a $10,000 reward to the finder.  A N. M. Tech field study of students came in the store often, and they professor confirmed that it was uranium.  Gunderson sent the box to Los Angeles to railroad officials he had known for many years.  Two days later, Tom Evans, the chief mining engineer for the Railroad, arrived in Grants and was looking for Paddy.  This event started the largest boom in the history of Grants.  Many major mining companies developed mines and built refining mills, and the population of the area tripled in a short time.

This discovery was a boon to the local petroleum industry.  The ore was very low grade, which meant that a great deal of non-productive material had to be moved in order to extract the uranium oxide.  Large earthmoving machines became commonplace, and the sale of diesel fuel skyrocketed.  The Gunderson petroleum division obtained a large share of this new business as a result of the company policy of providing excellent service and giving personal attention to the needs of the customer.

All of this activity resulted n a myriad of new happenings in the area.  In 1955, a radio station came to Grants.  In 1957, Salvador Milan incorporated the Village of Milan, and it became a residential and industrial area.  In 1958, Ray Gunderson, G. D. Ramsey, and a group of local and outside investors obtained a charter for the First National Bank of Grants.  In 1959, the Cíbola General Hospital was dedicated.  A Job Corps facility trained young men for several years and, as the government phased out this activity in 1968, Ray Gunderson was instrumental in obtaining the campus for a branch of New Mexico State University, a community college which has provided educational opportunities to local students for many years.  In 1981, a group of local citizens including many powerful political leaders recognized the need for a new county in New Mexico.  The county seat in Los Lunas was inconvenient and unwieldy for the citizens of the western half of Valencia County.  At that time, Cíbola County was formed by the Legislature of New Mexico.  This greatly improved the efficiency of government services to the citizens.

In 1967, Bud and Ray Gunderson purchased the interest of Carroll and Frieda Gunderson in the corporation.

In 1975, the community was shocked by the untimely sudden death of Ray Gunderson.  At that time, he was President of the Grants Chamber of Commerce, Master of the Masonic Lodge, past president of the Grants Lions Club, and involved, as he had always been, in many other local civic activities, including his untiring background work in the location of the New Mexico State University Branch in Grants.  His death brought about many changes and adjustments to the company, as he had always been an innovative leader in the organization.

Ray's wife Connie continued to manage the fiscal and office duties, and her daughter Cheryl Pynes and her husband Ronny moved to Grants from Texas and immediately assumed management duties as they learned the day-to-day operation.  The staff of the company worked diligently to overcome the loss of management suffered with Ray's death.  This dedication and hard work by all concerned made the transition less difficult.

At this time, there were two large projects underway.  The company had purchased acreage at the Milan interchange (Exit 79) for the purpose of constructing another retail outlet and for a restaurant to enhance the interchange traffic.  A 20-year lease had been signed with Jerry Goucher of Jerry's Restaurants that called for Gunderson to build a facility to his specifications.  Construction began on the restaurant in August of 1975.  Meanwhile, Bud and Ray had begun construction of a modern three-bay service station next door, and it was completed in December of that year.  The restaurant opened New Year's day of 1976.

There were many challenges in the next years.  The company sold very large volumes of fuel to several of the uranium companies operating in the area.  Our payment terms were net thirty days, as were the Chevron terms at that time.  Our monthly statement from Chevron was in the low six figures, and the cash flow was well within the financial capability of the company to handle.  In the late 70s, the price of petroleum products increased by a factor of five, and our monthly purchases for the same quantities of fuel suddenly reached the low seven figures, a staggering sum for us to handle.  We immediately changed our terms to net 15 days, and all of the customers understood and complied willingly.  During this time, there was a shortage of crude oil, and all of the national marketers allocated product to remain within their reduced production capabilities.  We were limited to the gallons we purchased the same month in the previous year, sometimes with a factor of as low as 70%.  We allocated to our customers in the same manner.  This fact assisted in collections, since no other distributor could supply them in the quantities they needed to continue operations.

At this time, the company was very fortunate in being able to sell a tract of land bounded by First, Second, and Roosevelt streets to Alco, which is a discount operation from Kansas.  This also gave us a cash cushion that assisted in the price crunch of the petroleum department.

The company had for many years held a general contractor's license from the State of New Mexico, with Bud as the qualifying party.  This made it possible to build and remodel as we wished without the formality of obtaining the services of another general contractor.  After meeting the residence requirements, Ronny Pynes took the examination and became an additional qualifying party on the general contracting license.  Bud had also been a Registered Engineer in the State of New Mexico since 1950, and this was an additional convenience and time and money saver in that we could generate plans and construct quickly.  We did use an outside contractor for the construction of Jerry's Restaurant, however, because of time constraints after the death of Ray Gunderson.

Chevron for many years had progressively converted “Wholesale Dealers” (consignees) to Jobbers.  In 1980, they began to work with us on the conversion of our agency.  This was completed in 1981, and we became “buy and sell” jobbers wherein we owned the physical plant and the inventory and were able to set resale prices and compete in the open market much more quickly than in the past.

We were unable to agree with the company on the value of the Chevron warehouse and storage facility on Airport Road in Milan.  As a result, the first large building project since Jerry's and the adjacent service station was the construction of a new facility on nearby property on Exit 79 which we purchased in 1970 from Zuni Mountain Country Club.

The Airport Road facility was idle and vacant for about 15 years, and Chevron finally gave it to the Village of Milan.  The Village built a very fine indoor swimming pool on the site, using the warehouse for a dressing room and offices after extensive remodeling.

We have a longtime friend in the Chevron organization, Charles Baxter.  He was a lubrication engineer during his career, and about this time he retired.  He was also a skilled carpenter and builder, so he and Ronny Pynes constructed the new storage facility including large underground storage tanks and a warehouse-office building which has been very efficient and adequate for many years.  Ronny is a skilled masonry and concrete builder, so the combination worked very well.

Environmental regulations soon made it very cumbersome to own underground petroleum storage tanks.  The rules did permit, however, the installation of above-ground tanks in enclosed vaults below the surface if they were ventilated and accessible.  Ronny developed an idea he had of constructing concrete vaults which contained tanks which were isolated mechanically and electrically from the earth.  These installations included double pressure supply lines which were also isolated, and, in the event of line failure, returned the product to the vault where it can be recaptured, avoiding a spill and contamination of soil and water table.  Ronny and his crews built some 15 of these vaults for service stations and industrial locations.  Each of these required a building permit and approval of the fire marshal in the area in which they were built.

In conjunction with the tank vault installations, Ronny and crew have over the years removed many underground tanks for others.  The company purchase of a large track excavator made it practical to perform these projects with relative ease.  The excavator will dig away the overburden and lift most tanks from the site and refill the pit.  These tank removals must be made in accordance with environmental rules.  In all cases, the New Mexico Environmental Department must be notified and a representative of that office must be present to check for soil contamination.  In the event that there has been a spill, the digging must continue until all of the bad soil has been removed.

The self-serve trend and the convenience store trend of the early 1980s made it obvious that we needed to change our retail facilities to this format.  In 1986, Ronny and his crew demolished a long-standing service station at 1201 West Santa Fe Avenue in Grants and built a convenience store and self-serve gasoline facility from the ground up.  It incorporates an underground storage vault to avoid pollution.  This has been a most successful location, producing many millions of gallons of sales over the years.  In 1988, he demolished a long-time service station at the Grants east interchange and built a similar facility incorporating another underground vault.  This, too, has been a very good location.

In the early 1980s, there were quiet indications of a decrease in the demand for uranium.  This soon became a startling reality to the Grants area as uranium consumers, by now mostly electric utilities, began canceling purchase contracts and the producing mines were one by one closed.  The mills slowly ground to a halt and the local economy was fractured.  We knew that we were a one-industry area, but there seemed to be no end to the boom until it really ended.

All of the electric utilities which contracted for uranium were constructing nuclear power plants.  This was a new and uncharted industry full of pitfalls.  The government was attempting to regulate this construction, but, since there were no previous guidelines, there was constant change in the middle of construction, causing massive cost overruns.  The utilities finally came to the conclusion that the construction of new nuclear plants was not cost-effective.  Fossil fuel methods of power generation, particularly coal-fired steam plants, initially cost much less than nuclear plants.  Another event which contributed to this slowdown of demand was an accident in an operating nuclear plant known as Three Mile Island in Pennsylvania.  In March of 1979, a threatened large leak of radioactive material into a suburban area caused worldwide fear of nuclear plants and triggered new regulations which made it impractical to operate nuclear generating plants in the United States.  Foreign plants continued to operate and still produce large percentages of electrical needs, particularly in France and other nations with limited fossil fuels.  A movie starring Jane Fonda called China Syndrome created more panic against nuclear power generation.

One by one, these purchase contracts were canceled or not renewed.  By 1985, nearly all of the major producers closed their operations in the local area.  Grants lost 6,000 jobs in one year.  Homes were boarded up as workers moved to other jobs.  Gunderson Oil volumes were drastically reduced as these mines closed.  We were fortunate in that we had diversified by locating retail outlets at the Interstate 40 locations which were not greatly affected by the shutdown.  Gallonage volumes at the retail level remained fairly constant through the next few years.

Ronny Pynes and the staff worked aggressively to replace these volumes and shortly contracted with Santa Fe Coal, Pittsburgh Midway Coal, and other lesser users to keep the gallonage up to a portion of previous years.  The company installed an unattended fueling facility at the location of the Plains Electric Generating facility at Prewitt, a unique development for that time.  The coal gallons were ultimately lost to our supplier, Giant Refining, as it is difficult to compete pricewise with the manufacturer even though you give better service and personal attention to the account.

The 1990s have been very productive years for the Gunderson Oil Company.  We were the first retailers in the Grants area to introduce Point of Sale equipment, which allows the customer to insert a valid credit card in a slot in the dispenser and then pump gasoline without the necessity of entering the store to pay for the purchase.  These units create and dispense a receipt at the island, and the customer may go on his way much more quickly and easily than with the older system.

We were also the first to introduce “Jumbo” fuel and oil containers into the area.  These steel tanks have the capacity of 10 barrels (550 gallons) and are easily handled with a fork truck at the loading facility as well as at the destination.

Ronny and Cheryl Pynes recognized the value of an unattended fueling facility that allowed 24-hour access for gasoline and diesel purchases.  They contracted with Pacific Pride, a leading national network of such facilities, and Ronny and his crew and staff constructed a facility at the company headquarters site at 1100 Motel Drive in Milan.  This facility permits trucks, automobiles, and wheeled machines to fuel with a card at any time of the day or night.  We have issued many of these cards to our customers in the area, and we also are able to serve any Pacific Pride customer from anywhere in the nation who holds a card and is in the Grants-Milan area.  The billing for these purchases shows the date and time of the purchase, which is of great assistance to the customer in controlling his equipment fueling.

Management also recognized that there was a vast area to the north of Grants whose petroleum needs were not adequately served.  Chevron personnel were also concerned and soon we were able to assume the Chevron jobbership in Cuba, N.M.  Our company leased a plant and storage facilities and engaged a local couple to operate and deliver fuels from this facility.  The telephone and fax communications permit them to function with support from Milan headquarters in a very efficient manner.

The company owns and operates a highway transport tanker, two smaller delivery trucks, a front-loading tractor, a skip loader, trailers, and other equipment which permit an in-house capability to conduct sales and construction operations anywhere in the state.  In addition to top management and accounting staffs, the operating employees at the various locations are well-trained and knowledgeable.

The success of the company over the years has been due in a great extent to the loyalty and devotion of the many employees.  This loyalty extended from top and middle management to the delivery personnel, the office assistants, and warehouse workers who have toiled long hours (6 full days a week in the early days) to accomplish the tasks of the day.  The company has always had a policy of fairness, honesty, and personal respect to all involved.  This reflects through to the customer, who can detect this fairness, and creates a loyalty to our company.

The success of the company in the early years must be credited to the remarkable vision, foresight, and capability of Carroll Gunderson, supported by his wife Frieda.  These two people mortgaged their home in Albuquerque in order to purchase an interest in the Bond Sargent Company in Grants.  At that time, there was little to attract anyone to the area.  The hours were long and the rewards minimal.  Gunderson moved to Albuquerque in 1916 after graduation from high school.  He was told to move there by his father in order that he might help his older brother who was ill from tuberculosis.  He and Frieda were married in 1920, lived in Bernalillo a short time, New Laguna for 7 years, and moved to Grants in 1928.  Frieda was expecting a child at the time, and moving to a town with no electricity, water, sewer, or doctor was a challenge.  Their grave markers at the Grants Memorial Park read “GRANTS AREA PIONEER.”  Nothing could be more true.

During his career in Grants, Gunderson was very active in civic affairs.  He served as Mayor of Grants for two terms, served in the New Mexico House of Representatives, was District Governor of Lions International, received the coveted Silver Beaver award from the Boy Scouts of America, and was a founder and first President of the Grants State Bank.  During WWII, he was instrumental with others in keeping a local group of loyal Japanese-American families from being sent to an internment camp.  An engraved plaque which was presented to his family posthumously reads “Carroll Gunderson Humanitarian and Friend Japanese-American Centennial of New Mexico 1880-1980.”  He played a large role in attracting the carrot and the uranium industries to the area, and all this time was running the business and rearing two sons.

Gunderson Oil Company functioned for 76 years with the business philosophy of:
“Quality Products at a Fair Price and Service, Service, Service.”

ADDENDA:  Under increasing pressure from Chevron to increase motor gasoline purchases, forcing quotas which were unreachable by Gunderson Oil Co., management sold the entire petroleum operation on June 7, 2004 to Honstein Oil Company of Santa Fe, NM.  This ended 76 years of successful operation by the Gunderson and Pynes families."

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