(The following article by Randolph Heaster was posted on the Kansas City Star website on December 6.)
KANSAS CITY — Kansas City Southern has changed the name of its Mexican railroad to Kansas City Southern de Mexico, S.A. de C.V.
Also, Kansas City Southern will combine some marketing and support functions for its U.S. and Mexican operations, a move that will include management changes in Mexico.
The name change, from TFM to KCSM, follows Kansas City Southern’s move earlier this year to take full ownership of Mexico’s biggest railroad. Kansas City Southern bought out its Mexican partner, Grupo TMM, in April. In September, Kansas City Southern settled a tax dispute with the Mexican government, which transferred the government’s 20 percent interest in TFM to Kansas City Southern as part of the settlement.
The integration of the U.S. and Mexican railroads began last month when Kansas City Southern appointed Richard M. Zuza senior vice president of international purchasing and materials. Also, the intermodal and automotive sales functions for Kansas City Southern and KCSM were combined, led by vice president Michael J. Smith.
The information technology departments also will be combined for the U.S. and Mexican operations. Scott E. Arvidson, vice president and chief information officer, will lead the company’s efforts to integrate its domestic computer operating system with the Mexican carrier next year.
Kansas City Southern also said Javier Rion, appointed KCSM’s chief executive in July, will leave within three months. KCSM will begin a search for a new president who will report directly to KCSM’s board of directors.
The restructuring includes Manuel Zulaica Lopez, KCSM’s director of operations, reporting directly to its board. KCSM’s train operations department is headquartered in Monterrey, Mexico.
In a separate development, Kansas City Southern said it has begun a $210 million public offering of preferred stock, the proceeds of which will be used to buy back 9 million shares of its common stock from Grupo TMM, Kansas City Southern’s biggest shareholder. The remaining 9 million shares of Kansas City Southern stock held by TMM will be sold in a public offering managed by Morgan Stanley.
TMM became Kansas City Southern’s biggest shareholder at the time it sold its interest in the Mexican railroad. Upon completing the offerings announced Monday, TMM no longer will have a stake in Kansas City Southern, said Bill Galligan, company spokesman.