CSX Railroad Chief Hays T. Watkins Promoted One-Stop Shipping
When Hays T. Watkins was 4, his parents noticed that he had memorized at least two dozen license-plate numbers and could match them with names of the cars’ owners. A newspaper in Jefferson County, Ky., described him as a “perfectly normal boy” with “an abnormal love for reading numbers.”
True to form, the numbers prodigy grew up to be an accountant. Less predictable was his ascent from a junior staff job at the Chesapeake & Ohio Railway to the chief executive’s post at the rail giant CSX Corp.
Mr. Watkins, who described himself as a country boy, negotiated the 1980 merger of Chessie System Inc., owner of the C&O, with Seaboard Coast Line Industries Inc., creating CSX. Mr. Watkins ran CSX—variously as president, CEO and chairman—until he retired in 1991.
Eager to create one-stop shipping, Mr. Watkins launched a trucking business and acquired Sea-Land Corp., an operator of container ships. CSX also bought barge and gas-pipeline operations. The company later sold most of those assets to focus on rail services. Customers relied on logistics companies to find the most efficient ways to move freight.
Mr. Watkins died July 29 at the age of 96.
He never had a career plan. “Everyone would be better off, I believe, if they simply concentrated on doing their very best and then basically let nature take its course,” he wrote.
As a rail CEO, Mr. Watkins inherited an unusual asset—the Greenbrier resort in West Virginia, which came with three golf courses, riding stables and a bunker designed to serve as a secret nuclear-bomb shelter for members of Congress. It had been purchased in 1910 by the C&O railroad.
Mr. Watkins loved the Greenbrier and decided to add other resorts. In 1986, CSX bought two Caribbean resorts and a third in Jackson Hole, Wyo., from Laurance S. Rockefeller. Two years later, under pressure from investors to stick to the core business, CSX sold those resorts for a sizable profit.
The Greenbrier, in bankruptcy proceedings, was sold in 2009 to Jim Justice, now governor of West Virginia.
Hays Thomas Watkins Jr. was born Jan. 26, 1926, near Louisville, Ky. The family moved to a farm, where they grew tobacco and corn, after his father lost his job as a bank cashier during the Depression. Young Hays learned to steer a horse-drawn plow and graduated as the valedictorian of his high-school class in New Castle, Ky., at age 16.
Determined to escape farming life, he enrolled at what is now Western Kentucky University, where he supported himself by waiting on tables at a boarding house. He joined the Army near the end of World War II, learned Japanese as part of preparations for a planned invasion, and then was sent to the Panama Canal Zone after Japan surrendered.
Mr. Watkins resumed his studies and earned a degree in accounting. He followed that up with an M.B.A. degree from Northwestern University, where his thesis was on “the separation of railroad operating expenses between freight and passenger services.”
The C&O hired him in early 1949, only to lay him off two months later when a coal strike slashed revenue. He briefly returned to the farm and hitched himself to the plow before being rehired by the C&O.
He met Betty Jean Wright on a blind date. They married a year later, in 1950.
He worked for a spell as an internal auditor at the railroad company. “One of our more interesting findings,” he wrote later, “was the lack of basic accounting knowledge by officers and key employees of the accounting department.” He created a course to teach them the basics.
Eventually he caught the eye of Cyrus S. Eaton, chairman of the rail company, and began attending board meetings to provide financial data. In early 1971, to his own surprise, he was named chief executive of what became Chessie System. During his first year as CEO, another coal strike cut deeply into revenue. The company skipped dividend payments for the first time since 1922. Mr. Watkins endured calls from furious investors.
As railroads lost freight business to trucking rivals, Mr. Watkins wanted to diversify and combine various means of moving freight under one corporate umbrella, he wrote in a 2001 memoir, “Just Call Me Hays.” The company in 1981 advertised “a truck-rail-truck combo providing door-to-door, single-system freight service at money-saving prices.”
Customers, however, were accustomed to working with a variety of transport companies, and most didn’t feel the need for a single provider. “They just were not going to change,” Mr. Watkins concluded later.
Diversification into energy and resorts didn’t pan out. Wall Street analysts “still looked at us as a railroad,” he wrote. “Everything else was extraneous.” As the company ventured into new realms, some of the railroad equipment deteriorated, and CSX lost market share. By the late 1980s, CSX had begun selling off peripheral activities and concentrating on its core.
Today, CSX doesn’t own barges or ships. About 93% of revenue comes from railroad operations, though the company also has a modest position in trucking. Last year it acquired a trucking company specializing in transport of bulk liquid chemicals.
Mr. Watkins, who lived near Richmond, Va., is survived by his wife of 72 years, Betty Watkins, along with a son, three grandchildren and a great grandson.
He hated sloppy desks and was eager to toss unessential papers. A neat desk, he wrote, is “the sign of a neat, quick mind.” He worked on the New York Times crossword puzzle daily, in ink. In his retirement, he researched his family roots in England, Ireland and Germany. His genealogical database, stored in large ringed binders, contained about 30,000 names—another memorable number.
Write to James R. Hagerty at [email protected]
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