Auto-Train Corp. chairman Eugene Kerik Garfield today vowed that the company will return to profitablility at the second half of the year.
But an unhappy stockholder, Charles Houston, lamented at Auto-Train's annual meeting, "You've done this before and said it before and it never came about."
"Projections are very difficult," Garfield conceded, but he outlined steps the company is taking to get back into the black during a two-hour meeting in which he debated acrimoniously with a few critical shareholders.
Auto-Train lost $366,715 last year and another $371,408 in the first three months of the current fiscal year.
Garfield did not promise that the company would show a profit when its second quarter report comes out around Christmas time. But he said, "Now that we have entered the second half of fiscal year 1978, I am confident the losses have come to an end.
Recent economy moves have cut expenses by $907,000 in the second half of the year and a new marketing effort will boost the sales, he said.
The Washington division of the American Automobile Association (AAA) has agreed to promote Auto-Train to its members and to those in Boston, New York, Philadelphia and Florida.
Garfield said that after years of talks the Mexican government has finally agreed to permit Auto-Train service there beginning next year.
He said the company will sell tickets in the U.S. for the Mexican venture - earning a 10 per cent commission - will collect royalties if the Mexican operation is profitable, and will sell currently idle rolling stock to the new venture.
The sale of equipment, however, was questioned by two shareholders who noted that Garfield had blamed part of last year's loss on a shortage of equipment.
"When you sell off equipment, it is like cutting off your arm," said Dr. David Teperson, an orthopedic surgeon from Hollywood, Fla.
Teperson said the company would be unable to expand if it sells off equipment. "All you're doing is getting cash because we can't borrow money."
Teperson barraged Garfield with criticisms, calling said Auto-Train a "personal playground for the executive staff." Teperson complained about the fees paid to board of directors' members, the salaries of executives, the building of a sauna and exercise room in the company headquarters and the company's failure to produce consistent profits.
Directing some barbs at the corporations's executives, he said, "It starts with chauffeured cars . . . Gene, you have a chauffeured car - Senators don't."
The directors of Auto-Train are "handpicked by you, Mr. Garfield," and do not criticize company executives, he complained.
Teperson, who said he owns about 30,000 shares of the stock, noted that the price of shares has tumbled from more than $60 to "$2 and change."
"The price has come down every year for five years," he complained. "We have been taking a bath."
Criticizing the company executives, for not taking more drastic measures, to restore profitability he said "management seems to be celebrating the death of a company, and I'm not very pleased with it."
Responded Garfield: "This company is not dead, Dr. Teperson. It is very much alive. If you want your investment to become substantial again, You've got to pull together."
After listening to Teperson's comments, Garfield said some of the charges were "patently untrue and absurd rumors . . . I do not have a chauffeured car," Garfield said. He did not explain that the chauffeur was laid off and the car sold as part of recent economy moves.
Garfield said he would not even respond tot he complaint that the company had "become a personal playground for executives." He noted that Teperson paid 45 cents a share for his stock which is still worth five times that amount, despite declining prices.
Critics of the company management were themselves criticized by Seymour Kleinman, corporate secretary, who along with garfield was reelected tot the board with approximately 94 per cent of the vote.
Kleinman said many of the questions raised were of the "have you stopped beating your wife?" variety. He urged dissident shareholders to "come to the horse's mouth and stop listening to other parts of the animal."
Garfield said recent changes in Auto-Train fares "have already demonstrated they are more attractive and will produce greater overall revenue. Sales for this fall are coming in stronger than anticipated."
He said the company will also benefit from an arrangement with Eastern Airlines to have passengers fly to Florida and ship their cars by Auto-Train.
The stockholders were not told, however, that the Interstate Commerce Commission's approval of the Eastern deal has been appealed, and the service will not start as soon as the company had originally announced.