Crown Central president resigns Dunlap was expected to be heir apparent to Henry Rosenberg

February 01, 1996|By Suzanne Wooton | Suzanne Wooton,SUN STAFF

The president of Crown Central Petroleum Corp., once seen as the heir apparent to Chief Executive Officer Henry A. Rosenberg Jr., has resigned as the company struggles to return to profitability.

The surprise resignation -- effective Feb. 29 -- of Charles L. Dunlap comes at the end of a four-year period characterized by mounting losses.

But analysts said yesterday that no successor is likely to change the way the Rosenberg-dominated com- pany operates.

"You won't see any significant change in the way the company's been run," said Kurt Funderburg, an industry analyst with Ferris, Baker Watts Inc. in Baltimore.

"It was never really out of Henry's hands. No substantive decisions were made that Henry [Rosenberg] wasn't involved in.

"The company has been struggling, obviously, but the entire refining industry is struggling," he said. "But I don't think that has anything to do with Mr. Dunlap leaving."

The Baltimore-based oil refiner and marketer reported its fourth consecutive annual loss in 1994, finishing $35.4 million in the red, partly due to a substantial write-off.

That was more than eight times as much as the $4.3 million it lost in the prior year.

While financial results improved during the first nine months of 1995, the company is still not optimistic about a turnaround, according to company spokesman Joseph M. Coale.

Earnings for 1995 are expected to be released later this month.

Mr. Dunlap, 52, was named president and chief operating officer in December 1991. He had been director and executive vice president of Pacific Resources in Honolulu before that.

At the time, Crown Petroleum was seen as a company treading water in good times and faltering badly during tough times.

And Mr. Dunlap was viewed by many as the next chief executive officer, with Mr. Rosenberg remaining chairman of the board. Currently, Mr. Rosenberg holds both titles.

Company executives yesterday gave little explanation for Mr. Dunlap's resignation.

"He wanted to pursue other things and felt more comfortable doing that without responsibilities," Mr. Coale said, adding that he was "absolutely not" asked to resign.

Mr. Dunlap could not be reached for comment. He was dealing with an impending strike at Crown's largest refinery in Houston yesterday, Mr. Coale said.

A search for his successor has not begun, he added. Mr. Rosenberg will assume the duties of president until a successor has been named, the company said.

Analysts described Mr. Dunlap as an extremely knowledgeable and experienced industry executive who made some very important contributions at Crown.

"He struck me as being a very solid, competent manager and good person," said Alvin D. Silber, an energy and oil industry analyst for Herzog, Heine, Geduld in New York. "I don't think Henry got rid of him. I wouldn't see much justification for that happening.

"He was a very competent guy surrounded by the Rosenberg family," he said. "I guess that takes its toll."

In addition to Henry Rosenberg, two other members of the Rosenberg family are among the company's top executives.

Some said Mr. Dunlap's decision may have stemmed partly from a ceiling on his earnings.

"It's a very, very tough business right now, and it was difficult to get performance out of the assets," said Mr. Silber. "His compensation was capped by the company's lackluster performance."

Mr. Dunlap earned $395,000 in 1994, according to company proxy, but apparently no bonuses have been paid since he became president because they are based on company profits.

Mr. Dunlap is the fourth president of the Baltimore-based company since 1980. But Mr. Coale said that rate of turnover is "not atypical or unexpected."

"There's a lot of volatility in upper management," he said. "It's typical across the corporate spectrum, so I wouldn't read anything into it."

The losses experienced by Crown in recent years are similar to those of other oil companies that are heavily vested in the refinery end of the business. Still, some analysts blame management by the Rosenberg family, which owns 52 percent of the company.

"They just don't understand financing and don't understand the oil business," said Marc Perkins, chairman of Perkins Capital Advisers, a Del Ray Beach, Fla., long-term investment firm that has invested in Crown Central over the years. "People around them make money; they don't make any money."

But others say Crown has historically been a conservative company that is not as diversified as some refiners.

In addition, analysts point to the cyclical nature of the industry. For example, while the company lost a total of $59 million in its four unprofitable years since 1991, it recorded total earnings of $108.2 million in the four previous years.

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