Krebs Elected New Santa Fe Southern Chief

Santa Fe Southern Pacific’s board of directors Tuesday elected Robert D. Krebs president and chief executive of the Chicago company.

The 45-year-old Krebs, who previously was president and chief operating officer, worked his way up through the operations side of Southern Pacific Transportation Co., which merged with Santa Fe Industries in December, 1983, to form Santa Fe Southern Pacific.

Krebs replaces John S. Reed as chief executive, a job that Reed emerged from retirement to take last April when the Santa Fe Southern board ousted John J. Schmidt. Reed, 70, will continue as chairman.

Many critics blamed Schmidt after the Interstate Commerce Commission last year rejected the proposed merger of the Santa Fe Railway and the Southern Pacific Railroad, which operated as competitors after the parents combined in 1983. The ICC has since refused to reopen the merger case and ordered Santa Fe Southern to develop a plan by the end of September to divest one of its railroads.

Krebs joined Southern Pacific in 1966, fresh from the Harvard Business School.

By choosing Krebs, Santa Fe Southern is “going inside the company, and they’re taking an operations guy who has youth and vigor,” said Joel Price, an analyst with Donaldson, Lufkin & Jenrette.

While Krebs has significant operating experience, “he has extensive corporate experience as well,” said Andras R. Petery, a railroad analyst with Morgan Stanley & Co.

“This company certainly has been subject to takeover and breakup rumors, and I think this indicates that the board will continue to operate the company itself,” Petery said. “They’re letting the younger generation take charge.”

Price said Krebs’ first task “clearly . . . is to work on the railroad divestiture, (but) once that’s accomplished, they have to decide if they are going to stay with the railroad business.”