Dan A. Colussy, who became president and chief executive of UNC Resources Inc. Jan. 1, has embarked on a program of rapid change. He is cutting costs, decentralizing management and planning for a major acquisition.
The acquisition is expected to complete the restructuring of the Falls Church company from a money-losing uranium and manufacturing conglomerate into a profitable technology and services company.
"We want a very lean corporate staff," said Colussy, who has cut the headquarters staff from 100 employes to about 55 and sold the corporate building and company jet. He declined to disclose how much money these moves have saved.
"The effort to reduce overhead costs at headquarters is consistent with the new management philosophy," which is to grant more autonomy to UNC's operating divisions and subsidiaries, Colussy said in an interview.
"We want them to develop their own strategic plans in businesses which they know better than we do," said Colussy, the former chief executive of Canadian Pacific Airlines. "We want to put the responsibility in the hands of people who are really close to the profits."
Last month, UNC discontinued its uranium mining business, the last of several troubled operations it has shed during the past year. UNC's remaining businesses are scattered from Connecticut to Washington State -- and all are operating profitably.
They include UNC Naval Products, which supplies nuclear fuel and reactors for the Navy's submarines; UNC Technical Products, which manufactures aerospace components; National Automatic Tool Co. Inc., which makes factory machinery, and UNC Nuclear Industries Inc., which operates a government-owned nuclear reactor.
UNC says its current operations are profitable, but the company's most recent earnings report reflects its mixed fortunes.
The firm's fourth-quarter results included a nonrecurring charge of $152 million, primarily a provision for losses on the disposal of its uranium properties. This pulled down earnings, despite a $171.7 million net gain from a litigation settlement last summer.
UNC reported a net loss of $122.2 million in 1984, compared with a loss of $13 million the previous year. Revenue increased to $301 million in 1984 from $260 million the year before.
The company's existing businesses "can be grown on their own," Colussy said. But the corporation also has enough cash on hand to expand.
UNC won a $300 million legal settlement last summer, including about $230 million in cash, in a case involving Chevron Corp. and several other companies. As of Dec. 31, the company had about $123 million in cash and short-term investments, a spokesman said.
Colussy said he has simple requirements as he shops for the right acquisition -- something profitable, well-managed, available and in a growing field.
"We are looking at a broad range of companies," Colussy said, including those involved in telecommunications, software, aerospace and manufacturing. The acquisition could be in a field related to UNC's other operations, but Colussy said compatibility "will not be a limiting factor."
This worries analysts, who are concerned UNC will make a purchase outside of its expertise. "The fear on Wall Street is that they will use a terrific balance sheet to make questionable acquisitions," said Rudy Mueller, an analyst with Sterling, Grace & Co. "This company has a long history of lousy acquisitions."
Mueller said that "the smartest acquisition UNC could make would be its own stock." Selling at about $9 a share, the stock "is awfully, awfully cheap considering the assets they have and the divisions they are operating."
He said the stock could be worth $14 to $18 by the end of the year and would be "a cheap, safe, good investment."
To assist in the hunt for a new acquistion, Colussy has hired Robert T. David as UNC's chief financial officer. David has an undergraduate degree in physics and a background in telecommunications.
He spent 15 years at General Signal Corp., serving for a decade as chief financial officer. During that period, General Signal mounted an ambitious acquisition program that increased its revenue from $50 million to more than $1 billion.
David left General Signal in 1980 to form ECS Telecommunications, Inc., now called VMX Inc. In 1982, he founded Tigon Corp. a company that specializes in electronic voice message systems built into telephones.
"We have no specific interest in satellites per se," said Colussy. "We are interested in telecommunications -- among other things -- and that includes a broad range of activity." The acquisition search has "certainly not focused on any specific area," he said.
Mueller said UNC has no expertise in telecommunications. "They know about jet engines, they are one of only two companies in the company making components for the nuclear navy, and they know about radioactivity. If you go into a business you know, you have a good chance of succeeding," he added.
The changes at UNC and the company's stock price have attracted the interest of Houston investor Charles E. Hurwitz. He has accumulated 6.7 percent of UNC through MAXXAM Group Inc., a company he controls, and has requested a seat on UNC's board of directors.
UNC has not decided how to respond to Hurwitz's request, but company officials are "talking to Mr. Hurwitz about how he can participate in the company." Hurwitz is "a very good businessman," Colussy said, adding that "he is a legitimate shareholder, and we want our shareholders to feel we are interested in their concerns."
MAXXAM Group Inc. also has told UNC it is considering purchasing additional shares and has received permission to do so from federal regulators, according to documents filed with the Securities and Exchange Commission.
The SEC filing also disclosed that MAXXAM representatives met in January with officials of Chevron Corp., which was left with 36.6 percent of UNC's outstanding stock and two seats on the company's board under the terms of the legal settlement.
MAXXAM officials asked Chevron "if we were interested in selling," said Charles B. Renfrew, a Chevron director and vice president who sits on UNC's board. The answer, for the time being, is no.
Chevron's shares are "not on the market now," Renfrew said. Under terms of the settlement, Chevron cannot sell its UNC stake until May 1987 without the approval of UNC's board. Chevron also must vote its shares proportionately with other UNC shareholders for the next two years.
"We have a great interest in the future of the company," Renfrew said. He added, however, that "every Chevron asset is conceivably for sale for a price," and that Chevron is "not interested in selling its UNC shares at a discount."
Colussy said he is "not overly concerned about a takeover."