THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, November 10, 1995 TAG: 9511100474
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: STAFF AND WIRE REPORT
LENGTH: Medium: 68 lines
A North Carolina millionaire has spent from $50,000 to $100,000 on an effort to derail the lease agreement between Norfolk Southern Corp. and the North Carolina Railroad Co.
Walker Rucker of Greensboro is trying to rally North Carolina Railroad's private shareholders to oppose a recent agreement on a 30-year lease extension for the 317-mile line, which connects Charlotte, Greensboro and Raleigh to the port at Morehead City. Norfolk Southern has run the line for 101 years.
North Carolina Railroad is 75 percent owned by the state of North Carolina, but a majority of its private shareholders must agree to any lease agreement. The 72-year-old Rucker owns a 2.5 percent stake in the line, which was built in the 1840s by his great-great grandfather, Gov. John Motley Morehead, to put the state's farmers a two-day ride from the port.
Rucker is mailing cartoons to the small railroad's 1,000 private shareholders that bash Gov. James B. Hunt Jr. and ask them to boycott a special meeting in December at which they are to vote on the lease agreement. If enough shareholders don't attend the meeting, a vote can't be taken.
At issue is how much Norfolk Southern pays to operate trains over the North Carolina Railroad.
Rucker claims that Hunt influenced the railroad's board to give Norfolk Southern low lease rates so the governor can offer more incentives to industries looking to relocate in North Carolina.
Under the proposed lease, Norfolk Southern would pay rent of $8 million a year. But Rucker and his supporters say the lease would provide a return on investment of just 1.5 percent. He said he has support from eight of the 10 largest private stockholders.
Norfolk Southern has threatened to abandon the line, jeopardizing 300 jobs at a Davidson County rail yard, if it doesn't get a deal it likes. Since the old lease expired at the end of 1994, Norfolk Southern has been operating over the line on a month-to-month basis under the terms of the old lease.
``We're just watching and waiting to see what happens,'' said Robert Fort, spokesman for Norfolk-based Norfolk Southern Corp.
So far, Rucker has mailed a half-dozen cartoons to shareholders poking fun at Hunt, including one depicting him as an engineer taking a train on a suicide plunge. He has a toll-free telephone hot line that urges shareholders: ``Do not vote. Do not respond. Do not attend the stockholders' meeting.''
His cartoons struck a nerve with NCRR President John McNair III, who sent a letter last week to stockholders criticizing the cartoons and asking shareholders not to side with Rucker. McNair vows to resign if the boycott is successful.
``They'll need to get somebody else to negotiate something they like,'' says McNair, a retired Wachovia bank executive, appointed to the railroad post by Hunt in 1993.
The governor's office isn't pleased with the cartoons, either. ``So much for substantive debate on serious policy issues,'' said Hunt spokeswoman Rachel Perry.
Rucker's beef with Hunt began in 1993, when Hunt replaced eight of the railroad's 15 directors as lease negotiations picked up. Hunt has said he wasn't trying to influence the talks.
Rucker has proposed that the state buy out the private stockholders, but Hunt said he couldn't discuss Rucker's proposals because of lawsuits filed in November 1994 by shareholders to stop the lease. Rucker felt patronized and decided to step up the pressure.
``You know how you get the attention of a mule? Swat him in the head with a 2-by-4,'' Rucker said. ``This is my 2-by-4.'' by CNB