The Men Who Loved Trains: The Story of Men Who Battled Greed to Save an Ailing Industry

26. “I Think We Want to Be Seen as Somewhat Crazy”

26 “I Think We Want to Be Seen as Somewhat Crazy” David LeVan did not resemble a railroad chieftain. Looking a decade younger than his 50 years, LeVan sported a great bushy mustache that underlay his brown eyes and glasses. The only sign of age was his receding black hair. He had come to Conrail from one of the large accounting firms and was known in the company as a cost-fixated bean counter who harbored an incredible knowledge of finance. His personal life was also a stark contrast to those of other railroad chief executives. Married to a young, attractive ski instructor, LeVan lived in a converted fire station in downtown Philadelphia. He and wife Jennifer spent much of their time skiing and riding some of the Harley-Davidson motorcycles that LeVan had collected and parked in the fire house. During his first decade at Conrail, LeVan moved slowly through several modest posts in middle management, but then his understanding of finance, his smooth articulation, and his ability to think on his feet marked him as a comer. Each year since 1988 293 “I Think We Want to Be Seen as Somewhat Crazy” LeVan had been promoted—and in the process he had moved around the company’s upper sphere learning the art of running Conrail. Although inexperienced in railroad operations, LeVan had an instinct for people and understood the importance of personal contact and leadership in such a company. Said Conrail’s vice president for corporate communications, Craig MacQueen, “LeVan would go out in the middle of the night at a crew change and talk to the men. That’s what was different. It was leadership by example.” LeVan brought significant changes, cutting through the bureaucracy and eliminating hours of needless meetings. Pushing out Charles Marshall, one of Jim Hagen’s protégés who headed marketing, he created a team of faithful followers at the top of Conrail. A number of officers liked him, but others thought him overrated. Said one manager, “I think history has been kinder to him than reality was at the time, than the current thinking was at that time.” One trait LeVan lacked was a good political instinct, and it would haunt him throughout his tenure as CEO. It was a marked contrast with Stanley Crane and Hagen. “Dave was not as seasoned as the other guys. He was not the gray-haired eminence the other guys had been,” said one Conrail executive. Pushed by determination to keep Conrail from being gobbled up and by a personal commitment to protect his shareholders’ investments, LeVan sat down with Les Passa, Conrail’s vice president for planning, and began analyzing the company’s potential role in the rail merger movement. By early 1995 the study had shown them enough for LeVan to look for an acquisition of his own in the West, one that would keep Conrail independent yet make it large enough to force the other roads to deal with the company more as an equal. He approached Phillip Anschutz, the controlling shareholder of the Southern Pacific, with an offer to acquire some of the SP’s routes and take rights to use its main line west of Texas to reach the West Coast. But he got nowhere. Then Anschutz agreed to merge SP with the Union Pacific, and against the advice of Bill Newman and some of the railroad’s other more politically attuned officers, LeVan proposed in September 1995 that when it acquired SP, Union Pacific should be required 294 The Men Who Loved Trains to sell Conrail routes of the Southern Pacific that ran from Chicago to Galveston and from New Orleans to El Paso. Those lines would have connected Conrail with the rich chemical market of eastern Texas and the NAFTA plants of Mexico. While past rail mergers required the approval of the Interstate Commerce Commission, there was a new regulatory agency in town. Congress had replaced the ICC with the smaller Surface Transportation Board, better known among railroaders as the STB or the Surf Board. The UP-SP merger would be the STB’s first major case. Contending that the UP-SP merger would create a monopoly, Conrail’s lawyers told the Surf Board that it should have those routes so that the chemical plants could have access to competing service. Championing competition was a most peculiar...