Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, June 26, 1993 TAG: 9306260098
SECTION: BUSINESS PAGE: A-4 EDITION: METRO
SOURCE: DANIEL HOWES STAFF WRITER
DATELINE: LENGTH: Medium
The company will seek buyers for NAVL's commercial transport division and Tran-Star Inc., a NAVL unit in Waupaca, Wis., that specializes in refrigerated transportation.
"We will improve the profitability of North American by focusing on household goods and specialized commodities in both the domestic and international markets," Alan Brogan, executive vice president for transportation logistics, said in a statement.
NAVL's Relocation Services and High-Value Products divisions will be retained, and NAVL - with the help of its parent, Norfolk Southern - will sharpen its focus on the logistics market.
News of the shake-up is not altogether surprising, given NAVL's comparatively poor performance since NS paid $369 million for it in 1985. For years, the trucking concern's numbers have proven a disappointment to senior executives and stock analysts.
In January, NS chairman David Goode signaled a coming shake-up when he told analysts that Brogan had been dispatched to NAVL's Fort Wayne, Ind., headquarters to make "whatever changes are necessary to improve performance" and more fully integrate the trucking unit with Norfolk Southern.
Conspicuously absent at that New York meeting was NAVL President Joseph Ruffolo. Analysts later said Norfolk Southern executives had hinted that Ruffolo would soon be replaced.
"We are committed to take the steps necessary to produce improved performance at North American," Goode said then, presaging Ruffolo's ouster. In early March, Norfolk Southern announced that Ruffolo would become a full-time consultant and Brogan would take over.
Last year, NAVL's revenues increased 4 percent over the year before - from $797.3 million to $829.6 million. But expenses for the same period rose by 9 percent.
Relocation Services accounted for $325.2 million, or 39 percent of NAVL's 1992 revenues; High-Value Products brought in $233.7 million, or 28 percent; Commercial Transport totaled $218.3 million or 26 percent, and Tran-Star $52.4 million, 6 percent.
In 1992, each of NAVL's four divisions showed increases over the previous year, ranging from a 1 percent uptick in the Relocation Services group to 16 percent for Tran-Star. Still, over the past three years, NAVL's expenses equaled or exceeded its revenues.
by CNB