Hartley Gives Up Final Unocal Title; Stegemeier New Chairman

Plain-spoken Fred L. Hartley relinquished his final leadership post at Unocal Corp. on Monday, handing the title of chairman over to Richard J. Stegemeier, president and chief executive.

Hartley, who relinquished the titles of president and chief executive when he retired in July, 1988, will continue as a non-employee member of the board. Speaking to shareholders at the company’s annual meeting in Los Angeles on Monday, Hartley, 72, said he asked the board to elect a new chairman.

“I’ve advised the board that I no longer wish to serve as chairman,” Hartley said during a brief speech loaded with praise for current and former associates.

Hartley had relinquished the posts of president and chief executive for “personal reasons.” Executives at the company Monday said the board made plans in 1985 to make Stegemeier president, chief executive and chairman by 1989.

The election of Stegemeier to the top board spot marks the official end of an era at Unocal, a period dominated by Hartley. Hartley--he was elected president and chief executive in 1964 and named chairman in 1974--expanded the company’s operations and presence and guided Unocal past the clutches of corporate raider T. Boone Pickens Jr. in 1985.

However, Stegemeier has clearly taken charge since succeeding Hartley as chief executive.

Stegemeier last year exhibited his independence as chief executive, for example, by selling Unocal’s headquarters building along with some other real estate. He also agreed to form a joint venture with the Venezuelan government, a deal under which Unocal is expected to give up half its assets in some Midwest operations in exchange for more than $500 million. Among the assests are a large Chicago refinery and 100 company-owned service stations.

“Those two moves would not have been made under Stegemeier’s predecessor,” said Thomas Wilson, an analyst at Duff & Phelps. “Hartley didn’t favor those decisions. . . . This (title change) won’t make much of a difference; Stegemeier has really been running the company.”

‘Remarkable Legacy’

Stegemeier hailed Hartley as an executive with “vision, integrity and determination” in comments before the start of a slide show tracing the highlights of Hartley’s 49-year involvement at the Los Angeles-based Unocal.

“You’ve left a remarkable legacy,” Stegemeier told Hartley.

One watershed period of the Hartley years--the failed 1985 takeover bid by Pickens--was highlighted during the slide presentation. To stave off Pickens’ attempt to get controlling interest, the company spent about $4 billion to buy about one-third of its own stock.

That successful counter left Unocal with $6.1 billion in debt in 1985. However, the company had reduced that debt level to $4.3 billion at the end of March, Stegemeier told shareholders. Stegemeier said the company would reduce the debt further by selling certain assets.

“If an asset fails to produce an adequate rate of return, we’ll sell it off or shut it down,” he said. “We are serious about this.” Shareholders were also given the latest financial results. Unocal reported Monday first-quarter net earnings at $87 million, a 48% drop from first quarter earnings of a year ago, which were affected by special adjustments.

Promising Results

The oil company in March of 1988 had first-quarter earnings of $178 million, which included a gain from a change in accounting principle for income taxes, partly offset by charges for writedowns. Without adjustments, first-quarter 1988 earnings were $44 million. Stegemeier said the first-quarter results showed earnings from petroleum exploration and production offset by lower earnings from refining and marketing.

First-quarter revenue was $2.64 billion, up 14% from $2.32 billion a year ago. Some analysts said the results were promising.

“Stegemeier’s made an excellent start,” said Mary Anne Sudol, an analyst at Fitch Investors.