McClure takes wheel at UniGroup as Baer retires

Rich McClure is moving into the driver's seat at UniGroup Inc.

He takes over April 15 at the Fentonbased firm that owns some of the nation's largest moving companies, when President and Chief Operating Officer Bob Baer ends a 25-year career at UniGroup.

Since 1977, Baer has built UniGroup into an industry powerhouse with $1.9 billion in revenue, while also juggling civic responsibilities such as leading the St. Louis Board of Police Commissioners and the St. Louis Regional Convention and Sports Complex Authority, the group that oversaw the construction of what's now the Edward Jones Dome.

Baer, 64, will remain as president emeritus and serve as an adviser to the board of directors through the end of the year. He wants to teach or lecture at a local university, and he's not ruling out another civic role. McClure said he wants to continue Baer's legacy of civic leaders hip, although he's not ready to announce a specific interest just yet.

McClure and Baer have similar backgrounds. Both served in the public sector before moving into the corporate world - Baer as executive director at BiState Development Agency, McClure as chief of staff for then-Missouri Gov. John Ashcroft, now U.S. Attorney General.

McClure, 47, emerged as the leader of UniGroup after a succession planning process that began 18 months ago.

McClure was working at Central Bancompany in Jefferson City in 1995 when he was tapped as executive vice president and chief operating officer of United Van Lines, a UniGroup subsidiary that's ranked the No. I household mover in North America.

Baer also recruited the chief of staff for former Mayor Vince Schoemehl, John Temporiti, now president of the Vanliner Group, an insurance subsidiary of UniGroup; Patrick Larch, president of the Transportation Services Group subsidiary, which sells and leases trucks and related moving equipment; Steven Dawkins, executive vice president of household goods and agency development within the Transportation Services Group; and Michael Kranisky, president of UniGroup Worldwide, which provides global management services.

"We put them through psychological testing. The board had a search committee that did the traditional interview process and ultimately wound up by selecting Rich," Baer said.

Setting a new course

McClure takes the wheel at a time when there are major changes in the moving industry, pegged at $7 billion a year by the American Moving and Storage Association, the Alexandria, Va.based industry trade group.

Technology is playing an everincreasing role, requiring major investments to keep the trucks running on track and on time. UniGroup's technology spending system-wide between 1997 and 2007 is pegged at $500 million. That includes the establishment of UniGroup University, a training program that's at the corporate headquarters as well as on-line.

The economic downturn resulted in fewer corporate moves in late 2001. UniGroup posted $11.9 million in earnings on revenue of $1.9 billion in 2001. Revenue was down 4.4 percent and earnings fell 35 percent from the prior year. It could be six months to a year before the volume of business returns to normal, McClure said.

Strengthening the balance sheet

In 1999, the UniGroup board adopted a financial blueprint to boost the balance sheet.

Part of the strategy called for United and Mayflower agents to take 1 percent less commission for 27 months.

"Not everyone was happy we were keeping 1 percent," Baer said. "But we said 'We're a partnership and the stronger the van line, the more we can do for all of you out there in the field."' The commission structure has since returned to previous levels.

In June, UniGroup sold a $100 million lease portfolio held by Total Transportation Services to Wells Fargo Equipment Finance. That took a lot of debt off the balance sheet, Baer said. As of Dec. 31, UniGroup had $50.3 million in debt, down from $216.4 million a year earlier.

UniGroup also established a line of credit with Vanliner Group. UniGroup can tap into Vanliner's surplus, and "rather than letting that money just sit there, we're putting it to work by loaning it to UniGroup, which is paying Vanliner a good rate of return. It's allowing us to borrow less money," Baer said.

Baer said his background in the public sector served him well, as he expects it will for McClure.

"The agenda in the private sector generally is shareholder value and profitability. There's a fairly clear agenda that everyone can pursue," Baer said. "In the public sector, there are competing interest groups ... You are forced to coordinate, collaborate and build bridges between those various groups."