L. Stanley Crane, chairman of Consolidated Rail Corp., listed two major concerns yesterday with the Conrail employes' offer to purchase the federally owned freight railroad for considerations they claim are worth $2 billion.
In the first official response to the employes' offer, made Tuesday, Crane said that while he supports returning Conrail to private ownership, he also believes that "it will be in the best interests of all parties to reduce the debt to be borne by the corporation and thereby increase its financial flexibility."
A keystone of the employes' offer is $500 million in cash, which would be raised in the financial markets and would become a mortgage against Conrail. "This raises serious questions that need to be reviewed," Crane said.
He also said that he is " particularly concerned that the plan does not make clear" how the independence of management would be assured.
Brian Freeman, financial consultant for the employes' group, said yesterday that "in the abstract," Crane's points were "fair and reasonable. These are obviously issues everyone ought to be comfortable with before a deal is completed."
Crane's concerns parallel those of several in the federal government who are not anxious to load Conrail up with new debt just as it is beginning to show a profit after years of consuming federal subsidies.
James H. Burnley IV, general counsel of the Transportation Department, which will manage the Conrail sale, said that DOT wants to understand several fine points of the employes' offer and will make initial inquiries in the near future.