M-K Picks Ex-Auto Exec As Chairman Robert Miller Helped Save Chrysler, Faces Another Daunting Challenge
Morrison Knudsen Corp., struggling with the worst crisis in its 83-year history, Sunday named Robert Miller Jr. as its new chairman.
Miller, 53, a former vice chairman of Chrysler Corp., helped negotiate the automaker’s financial rescue in 1980. He also advised Olympia & York Developments Ltd., the Reichmann family’s real estate empire, during its protracted debt negotiations in 1992.
Miller fills the position vacated two weeks ago by William P. Clark, who had been Morrison Knudsen’s acting chairman.
“Morrison Knudsen is one of America’s great national treasures,” Miller said in a telephone interview Sunday from his home in Sun River, Ore. “It would be a great tragedy for us all if it were to disintegrate. If I can help avoid that disaster, I can’t resist the challenge.”
Miller will head a leadership team that includes Robert Tinstman, Morrison Knudsen’s president and chief executive and a 20-year veteran of the company, and Denis Slavich, the chief financial officer, who has experience at the Bechtel Group and at Fluor Daniel.
His appointment comes as Morrison Knudsen, which helped build national landmarks like the Hoover Dam and the San Francisco Bay Bridge, is engaged in critical negotiations with 28 banks, led by the Bank of America, a unit of BankAmerica Corp., and Mellon Bank, a unit of Mellon Bank Corp.
The Boise company already owes the banks $235 million and is negotiating for at least $50 million in fresh credit at a time bankers’ confidence in the company has been severely shaken.
Last summer, in the sixth year of William Agee’s controversial term as chairman and chief executive, the public picture of Morrison Knudsen’s finances began to deteriorate sharply.
Agee had pushed the company into highly visible but ultimately unprofitable mass-transit equipment projects; aggressive asset sales screened the worsening problems until July, when the value of important transit-car contracts was abruptly and sharply reduced.
By October, despite Agee’s predictions of a turnaround, the company no longer complied with its loan agreements.
On Feb. 10, Agee was forced to resign, and soon after, the company predicted that its 1994 loss would be $175 million.
That was just the beginning. On March 20, the company warned Wall Street analysts that its 1994 loss would be closer to $310 million, and on the same day, announced the resignation of Clark, a board member who stepped in as acting chairman the night Agee resigned.
Sunday, Miller said: “I have talked with a number of the bankers to get a sense of their attitudes. They are a bit stunned by the suddenness in the downturn in the fortunes of the company” and by “the leadership vacuum” created by Clark’s abrupt resignation.