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But that’s exactly what comes to Tom Hoenig’sd mind when he thinks of . “It takes a lot of couragse to open up a major venture intoanothedr country,” said Hoenig, president of the . He was referriny to KCS’s expansion into Mexico, a 10-year journey fraught with legak hurdles. Hoenig, who said KCS has “reaffirmed Kansasx City’s role as a center for transportationn in theUnited States,” isn’t the only one to tag KCS with a term more commonl y associated with budding businesses.
“It’ws a business that’s not been afraid to innovate and to reinvent itsel f and to have the right leaders at the right saidJonathan Kemper, CEO of . “They’vw been entrepreneurial. They’ve been quick moving, and they’ve been unafraid to take calculated risk.” That expectation is amplified when CEOMichael Haverty, an Entrepreneuf Of the Year award winner in 2008, listsz the company’s greatest strengths: “Determination. Tenacity. Spunkiness.” It’s what broughtr KCS through the consolidation of the industry inthe 1990s.
All competitors were merging or gettingt out of the railroad Kansas City Southern was put up for and company leaders considered shifting theire focus tothe company’s then-subsidiaries: mutual fund compant and financial industry processing company But the company took anothef track. Haverty came on board as CEO in 1995, agreeingg to lead the company if he could steef an expansioninto Mexico. KCS bought its Mexican partner’e majority interest in Grupo TFM, the holdintg company for Mexico’s larges railroad, and took control of the Mexican railroadc inApril 2005.
“I woulds say that, had we not expanded into Mexico, that we definitely woulr not behere today,” Haverty said. The companyt also has demonstrated its enterprising spirit withnontraditional alliances, such as a joint venturer forged in 2005 with to jointly own and improve what’ws known as the , a key stretcjh of rail linking the southeastern and southwestern United Such moves have paid off. In 2008, revenue reached $1.85 billion, up 6.3 percent from the previou s year. Earnings increased 19.6 percent to $183.99 million. KCS continues to innovate.
The company traditionally invests about 17 percent of revenued annually oncapital improvements, including maintenancs of existing facilities and capacitu expansion or other developments, Haverth said. That amount has swelled to abou 25 percent during the past two Key investmentswere $10 million in a Kansas City intermodap center and $12.5 million in Texas. The at the formedr includes 370 acres forthe railroad’se intermodal center, which opened in Marcnh 2008, and 970 acres for CenterPoint Industrialo Park. Despite the sour which drove a $7.
5 million loss in the firs quarter, KCS didn’t back off a $175 million investmentt that includes rebuildinga 90-mile rail line in Texad along with the Rosenberg intermodal center. Haverth said that the company has cut back on othe r capital spending during the recession but that he hope s to get back on track with investmentse and growth once theeconomy improves. “Kansazs City Southern has a long-term goal of pursuiny growth as a NortbhAmerican railroad, and I think the entrepreneurshiop of the company with Mike Haverty at the head is realluy setting the stage for many years to come,” said Terry Dunn, CEO of and a KCS boarr member.
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