‘ROUGH’ IMPRESSIVE FIRST YEAR
U.S. Sugar CEO Leads Restructuring, Layoffs, 24-hour Harvesting

Publication: Palm Beach Post
Printed: Monday, May 28, 2001
Written By: Susan Salisbury, Staff Writer

CLEWISTON - Clewiston was curious about Robert Dolson when he came to town in July to take over as chief executive and president of U.S. Sugar.

People wanted to know: Had he and his wife moved into the house they bought and were fixing up in Clewiston, or were they still staying at the company-owned Clewiston Inn?

"Everyone was interested in seeing him and sizing him up, whether they worked for U.S. Sugar or not," says the company’s spokeswoman, Judy Sanchez.

It was a combination of Southern hospitality and small-town neighborliness, but a little disconcerting for a reserved Midwesterner such as Dolson. Do they really want to know that? He asked when the question appeared in the company newsletter.

But it’s the kind of thing you have to get used to when you leave St. Louis, a city of 2 million for Clewiston, a town of 7,000 in the interior of south-central Florida.

"I could drive to the drugstore in St. Louis without being recognized," says the 55-year-old Dolson, who commutes only 2 minutes from his house in Clewiston to the company’s brick headquarters a few blocks away. He and his wife, Jeannie, moved into the house after a three-month stay in one of the Clewiston Inn’s apartments. Working 12-hour days, he hasn’t seen nearby Lake Okeechobee except from an airplane.

Living a less anonymous life was just the beginning of the changes for Dolson. For 18 years, he headed Continental Water Co., a privately held group of regulated public water utilities with revenues of $180 million a year that operates in four states and employs 1,100.

"We weren’t news," Dolson said, recalling the days he served as Continental’s president and director (1982 – 1999) and board chairman (1989 – 1999). He was president and director of its holding company, National Enterprises Inc., from 1984 to 1999 and board chairman for 10 years.

The company did make the news briefly in 1999 when it combined with American Water Works Co. Inc. of New Jersey, a publicly held utility with customers in 22 states.

"A water utility is a regulated business. By definition, that makes it a cost-plus business," Dolson said, meaning that a utility can raise its rates to meet costs. The sugar company is a competitive business. It’s definitely not a cost-plus business."

It’s also a little trickier to run, he said.

"The complexity of this business is something I didn’t realize. A water company pumps water into a pipeline. Here, we have farming and manufacturing. It’s a little more complex than the water company," Dolson says.

Welcome to the sugar industry, where the world watches and criticizes the politics and policies that affect sugar and lobbyists abound. Dolson’s calm, thoughtful and deliberate demeanor—perhaps befitting his early years of work as a certified public accountant following graduation from Southern Methodist University in Texas—is so far a good match for the volatility of the sugar industry.

During his first three months at U.S. Sugar—the nation’s largest sugar producer and the world’s second largest make of not-from-concentrate orange juice—Dolson presided over the layoffs of 327 workers and other cutbacks, the restructuring of the company into separate sugar and citrus divisions, and the forfeiture to the federal government of 35,000 tons of sugar after a huge period of record-low prices for the commodity.

Then there was the harvest that began in September and for the first time ran 24 hours a day under floodlights in the fields to be more cost-effective. The harvest of 815,000 tons of sugar ended in April, a crop slightly reduced from last year’s by January’s freezes and South Florida’s continuing drought. A new three-year union contract was also negotiated.

Those who have observed him say they’re impressed so far.

"It’s been a rough honeymoon for him," says John Dunckleman, vice president of the Florida Sugar Cane League, a Clewiston-based industry group. But he says Dolson brings considerable strengths to the job.

"He’s an astute observer who listens carefully. When he speaks, everyone listens," Dunckleman said.

Indeed, Dolson didn’t come to the job totally unprepared. He has served on U.S. Sugar’s board since 1994 and was a member of the audit and compensation committees. But he says those four-times-a-year board meetings didn’t give him the same perspective as his day-to-day work does now. Still as chairman and president at Continental Water, he had one thing in common with U.S. Sugar: the Charles Stewart Mott Foundation in Flint, Mich.

Mott, a multimillionaire philanthropist who died in 1973, formed U.S. Sugar in 1931 and also owned the water utilities that became Continental. The foundation owns 16 percent of American WaterWorks, the company Continental combined with, and along with related interests, it owns most of U.S. Sugar’s closely held stock.

U.S. Sugar’s employees own the rest of the company.

Dolson’s ties to the Motts are personal, too. He began work for the water company as an accountant in 1973 when his father, Frank, was president of the firm.

"There’s been a tie between the Dolsons and the Motts going back to the 1950s," said William White, who chairs U.S. Sugar’s board of directors and is also president, CEO and trustee of the Mott Foundation.

"When we realized we were going to have an opening at U.S. Sugar, we said, ‘We’ve got the best guy we could possibly get right here.’

"He has good discipline and orderly thinking. He knows how to run a complex company," White said. "He’s understated and quiet. If he tells you something, he’ll deliver it."

It was White who called Dolson a year ago when J. Nelson Fairbanks prepared to step down after 13 years at the helm of U.S. Sugar. After six weeks of negotiations, Dolson took the job. The company hasn’t disclosed his salary.

The Dolsons decided that, with one of their daughters in college and the other married, the time for a major change was right. They headed to Clewiston.

As CEO, Dolson has brought significant operation changes. His philosophy is to "throw out the 50-year-rule," a phrase referring to the way established companies such as U.S. Sugar tend to do things the way they’ve always done them.

Dolson ordered the removal of the imposing double doors that once sealed off both first- and second-floor offices at the company’s headquarters. The open door policy is more than symbolic, with Dolson making the rounds to each department for informal 90-minute meetings, at which he solicits employees’ opinions. With about 2,500 employees on the sugar side and 500 in citrus, it’s taking a while to meet with them all.

Employees such as Greg Thompson, a machinist and 12-year employee, say it’s too soon to tell whether changes Dolson has made, such as people management sessions for supervisors, have made a difference.

"The future will tell," Thompson said.

Dolson acknowledges he’s still learning.

"Do I know all the terms yet? No. It’s like learning a foreign language."

He’s becoming conversant in U.S. trade policies that affect sugar, as well as the 2002 federal agriculture bill. Like other leaders of the U.S. sugar industry, he wants imports restricted.

Dalton Yancey, executive vice president of the Florida Sugar Cane League in Washington, says of Dolson: "He’s been very supportive of what we do in Washington. I think he has an appreciation for industry associations. He sees the economy of that.

What’s ahead? Dolson said the company doesn’t plan to buy more land, just to farm more efficiently on the 164,000 acres where it raises sugar cane and its 29,000 acres of orange groves. The only expansions planned are increasing storage capacity at its juice plant and refining capability at its sugar refinery.

"We’re trying to do what we do better," he says.

Although it hasn’t been an entire year yet, Dolson said he expects his cost-cutting measures, including department-by-department budget trimming on everything from supplies to outside consultants and travel, to save $20 million a year. The private company doesn’t reveal its revenue or profit. But based on its sugar and orange juice production, gross revenue is more than $450 million a year.

"U.S. Sugar was financially solvent before, and it is financially solvent today," Dolson said. "What we have done is improve the ability to sustain the company under long-term pressures."

Despite the challenges, Dolson says the American sugar industry can survive and thrive.

"If we balance the domestic demand against domestic production capacity and limit foreign imports to the difference, then the industry.