William Agee, best known for a hostile takeover attempt of Martin Marietta Corp. in the 1980s that backfired and gave rise to the notorious "Pac-Man defense," could well go down in history as the textbook example of a brainy chief executive officer with grand visions who never managed to turn them into reality.
The 57-year-old executive's latest stumble -- an ill-fated foray into rail car manufacturing at Morrison Knudsen Corp. -- has buried the old-line construction and engineering company under a mountain of debt and given rise to several shareholder lawsuits.
Officially, the Boise, Idaho, company would not elaborate on several dramatic disclosures it made last week: that it expects 1994 losses to be worse than anticipated, that it plans big write-downs on construction and transit projects, that it has defaulted on loans, that it will eliminate the fourth-quarter dividend -- and that a search is under way for a successor to Mr. Agee.
The cascade of bad news led Standard & Poor's Corp. to lower its rating on Morrison's senior debt to one notch above junk-grade status, and the company also said that it probably would sell its noncore businesses.
Frustrated employees who have chafed under what they viewed as Mr. Agee's imperious, absentee management style are cheering the thought of his looming departure.
"They can't wait to get rid of the guy; they think he's a maniac," said one industry executive with close contacts at Morrison Knudsen.
Management consultants said that Mr. Agee appears to have broken many of the cardinal rules of corporate leadership, notably by spending too much time away from headquarters at his Pebble Beach home in California, instilling an atmosphere of fear and paranoia rather than loyalty, and spending corporate funds on -- among other items -- landscaping for his home and a near life-size bronze sculpture of Mr. Agee and his wife that adorns a company depot in Boise.
"There's a confidence gap," said Ellen R. Hart, vice president of Gemini Consulting, a management consulting firm in Morristown, "When much of what I do [as a leader] seems to be for my convenience, my messages about following me don't ring true."
Mr. Agee's basic problem, University of Southern California business professor Warren Bennis said, is an inability to manage expectations -- a difficulty, for that matter, which also afflicts another leader, President Clinton.
"Everywhere [Mr. Agee] goes, he chases horizons," Mr. Bennis said, but the results don't match the ambitions.
To Mr. Bennis' thinking, Mr. Agee has become a classic example of a current management trend: "failing upward." No matter what corporate disasters he leaves in his wake, Mr. Agee's resume shows that he always seems to end up with a bigger job.
A Boise native with a master's degree in business administration from Harvard, Mr. Agee first became publicly known in the late 1960s as chief financial officer of Boise Cascade Corp., a free-form conglomerate that crashed after revelations that it had booked revenues up front on land sales on which the buyers later reneged.
By the time the improprieties were discovered, Mr. Agee had left for Bendix Corp., a big auto industry supplier.
There, after being named chairman and chief executive, he was romantically linked with Mary E. Cunningham, a protege whom he had rapidly promoted -- but who at the time was married to someone else. She resigned, and the two later were married.
They have two children and spend much of their time in a Mediterranean-style home overlooking the 13th fairway at Pebble Beach Golf Links in Monterey, Calif.
In 1982, Mr. Agee plunged into the decade's merger craze, attempting a hostile takeover of Bethesda-based Martin Marietta.
'Pac-Man defense'
When the aerospace giant turned around and began buying shares of Bendix, pundits dubbed the maneuver the "Pac-Man defense."
Allied Corp. ended the stalemate by intervening on Martin Marietta's behalf and swallowing Bendix.
But the fight nearly wrecked Martin Marietta, which took years to recover. Bendix's various operations in the Baltimore area became units of AlliedSignal Inc. Mr. Agee departed with a $4.2 million golden parachute.
He then spent several years as a consultant and venture capitalist while serving on the boards of companies such as Morrison Knudsen and Dow Jones & Co., publisher of the Wall Street Journal.
In 1988, Morrison Knudsen, under siege from cost overruns and slumps in heavy construction, tapped Mr. Agee to head the company.
At a business known for such brawny projects as the building of the Hoover Dam and the trans-Alaska oil pipeline, Mr. Agee cut the payroll and sold a money-losing shipbuilding operation. He also embarked on a risky strategy of manufacturing rail cars.
Three years ago, capitalizing on a "Buy American" fever that he helped create, Mr. Agee began aggressively pursuing contracts with transit authorities in Texas, Illinois, New York and California that had been handing fat jobs to overseas manufacturers from Japan, Germany and other countries.
In a bitter blow, Los Angeles awarded its Green Line contract to a foreign team -- Sumitomo of Japan and Siemens of Germany -- even though Morrison Knudsen had submitted a lower bid. The Metropolitan Transportation Authority decided that Mr. Agee's company did not have the technical expertise to build the cars.
But elsewhere, Morrison Knudsen documents and statements now reveal, Mr. Agee won contracts -- at a heavy cost.
To undercut competition, he submitted unprofitably low bids that have come back to haunt the company. For the first nine months of 1994, it faced $59 million in anticipated losses on four transit division contracts.
Debt ballooned in that period to $218 million, from $47 million at the end of 1993. The company also needs to borrow $150 million simply to complete the transit projects it has under way.
Meanwhile, Mr. Agee remains at the helm until a replacement is found. Then, he says, he plans to retire.
But Mr. Bennis wonders whether this "young 57-year-old" will give up the corporate whirl.
Despite all the history, Mr. Bennis said, "I can't believe he's going to stay retired."