It’s hard to sustain long-term business growth with short-term strategies. That’s what Michael E. Uremovich discovered in 2006, shortly
after assuming his new role as chairman and CEO of Pacer
International Inc., an intermodal and logistics freight transportation
services provider.
Pacer’s former management team had made 14
acquisitions leading up to an initial public offering in 2002, sidestepping the challenging and often expensive task of dealing with acquired
owners and fully assimilating the acquired companies.
“It was
important not to disappoint investors in the early stages after going
public,” Uremovich says. “So the former management team chose not
to address some of the strategic acquisition issues, until the company
became more mature. It was clear to me that I needed to act and redirect the company in order to stimulate growth.”
Much of the capital raised during the IPO went toward reducing
acquisition debt, not infrastructure consolidation, and soon the company’s revenue and earnings growth slowed. Incongruent computer
systems were costly to run and failed to satisfy customer needs, while
a patchwork leadership team failed to operate under a unified vision.
Now, Uremovich would have to tell shareholders that he needed to
make a number of changes, some of which would require significant
capital investments.
Uremovich is regarded as a logistics industry guru, who helped revolutionize the business. He was a member of a team that invented the double-stack train, where one cargo container rides atop another, doubling
the train’s capacity for transporting goods and reducing costs. He also
served as managing director of the worldwide transportation practice
for Coopers & Lybrand and was a principal at Booz Allen Hamilton.
Prior industry experience gave him knowledge about the needs of customers, which he quickly put to work as part of a plan to reinvigorate
growth at Pacer.
