APC CHIEF TELLS WHY ORRIS LEFT

APC CHIEF TELLS WHY ORRIS LEFT

The sudden departure of Don Orris from American President Cos. late last month was prompted by differences over how autonomous APC's domestic transportation subsidiary should be, said Bruce Seaton, the company's chairman.

Mr. Orris "wanted to go one way, and the great majority in the company wanted to go the other way," Mr. Seaton explained in an interview last week.Mr. Orris resigned April 30 after several years as president of American President Domestic Co. Within a matter of days, the company also announced several other top-level management changes.

Mr. Seaton described his ex-colleague as "a very knowledgeable, hard- working, decent person." But he said Mr. Orris resisted greater integration between American President Domestic and other parts of the company at a time when APC is striving to bring its units closer together. Mr. Orris was not available for comment.

"One of the fundamental elements is to put people in management levels that agree with the basic premise, that function more as a team than as individual companies," Mr. Seaton said.

He said "philosophical differences" are often cited by companies when their executives leave, a claim that often meets with justified skepticism. ''In this case it really was a philosophical difference," he said.

In a wide-ranging interview in his 25th floor office in Oakland last week, Mr. Seaton spoke at length about recent management changes and the future course of the company.

The 64-year old executive said that several other top level executive changes recently announced at APD and American President Lines are designed to better circulate ideas and talent through the company.

In recent shifts, APC named Timothy J. Rhein, former president and chief operating officer of American President Lines, to be chief executive of APD, and named George Hayashi, former APC vice chairman, to be president and chief executive of APL.

The company also named Michael Diaz, former president of American President Intermodal, as APL's executive vice president and chief operating officer. And John G. Burgess, former APL senior vice president of North America, was named APL's executive vice president and chief operating officer.

None of the four executives were immediately available to comment on their new positions.

Mr. Seaton said he thought Mr. Hayashi and Mr. Burgess made a good team. Mr. Hayashi has extensive experience on the international maritime side and has worked at the company since the mid-1960s. As outlined, Mr. Hayashi will concentrate primarily on customer relations and strategy. Mr. Burgess will handle day-to-day operations.

Some analysts suggest that Mr. Seaton is putting his best management firepower in the troubled domestic business by naming Mr. Rhein and Mr. Diaz to head the unit.

Mr. Seaton said it has been a tough management spot over the past four or five years, but the domestic operation is not seen as a drag on the company. ''I think it has great long-term potential," he said.

He added that Mr. Rhein and Mr. Diaz are two strong managers while Mr. Rhein has supportedgreater integration among company divisions. This integration does not mean an outright merger, but closer teamwork between companies.

While Mr. Rhein has been in the international area over 20 years, he will benefit by broadening his exposure within the domestic business.

"Tim is a very good manager," he said. "I feel we need some improvement in the way the domestic side is managed."

Asked whether Mr. Rhein was being groomed as the heir apparent, Mr. Seaton said "At this company we don't get into speculation about heir apparents."

APC's domestic operation has lost money in recent quarters as competition expanded significantly and many other players have improved their own systems.

In recent months, APC's domestic business has seen some key executives defect, including Nolan Gimpel and Don Orris.

Asked whether the loss of these key managers was a concern, especially given the chance they could go to a competitor, Mr. Seaton said, "It's always possible whenever anyone leaves. I said it was possible, not a concern."

Recent reports inside and outside the company have also raised questions about the role of John Lillie. Mr. Lillie, 53, was named an APC director in January. He is a general partner in a private investment firm and a former chief executive of Lucky Stores Inc.

Mr. Lillie has reportedly expressed interest in a top management role in parent company APC. Insiders say he is now undergoing very extensive training at APC including trips to overseas facilities. Mr. Seaton declined to provide specifics on any wider future role for Mr. Lillie. "He has asked for a very in-depth indoctrination," he said. "I can't say anything more."

Mr. Seaton has a reputation for reorganizing APC's top management every few years. Generally the recent top management changes at APC, APD and APL are taking place within the context of a management-intensive business, he said.

Shipping, rail and trucking are not high-technology areas that require specific technical expertise, he said. "You don't need someone to be on a 10- year training program to be a vice president or run an important region."

Mr. Seaton said the company may see some selective cuts but no wholesale layoffs. While APC has grown very quickly in the 1980s, he said, the international shipping side has been fairly stable. The domestic side, which has seen the fastest growth, could gain some efficiencies by reorganizing.

Mr. Seaton said the announced reorganizations by Sea-Land Service, Crowley and APC within a few months are not part of a broader retrenchment. "I don't see any broad fundamental change in the industry," he said, adding that APL has tried to maintain its investment pace in upturns and downturns.

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