Morrison Knudsen’s Agee Retires

Engineering and construction firm Morrison Knudsen Corp. on Wednesday announced the retirement of Chairman William Agee as the company forecast a loss for the year and eliminated its quarterly dividend.

The Boise, Ida.-based firm, which also said it might sell some operations, has struggled with cost overruns at its locomotive remanufacturing business and contract delays in its construction division, resulting in $43.7 million in losses over the past two quarters.

“It’s one of those companies that just hasn’t been able to get it right,” said Kemp Fuller, managing director of Commonwealth Associates.

Shares of Morrison Knudsen tumbled $3, or 24%, to $9.50--their lowest level since 1982--making it the fourth-steepest-declining issue on U.S. markets in Wednesday trading.

Jeanne Terrile, a Merrill Lynch analyst, was blunt in her report: “We continue to see little to be optimistic about . . . although the possibility of new management from outside the company could ultimately be viewed as a plus.”

Agee, 57, gained notoriety at Bendix Corp., where he was criticized for a very public affair with Mary Cunningham, a young Bendix executive who rose quickly through that company’s ranks.

Both eventually lost their jobs at Bendix. They later married. He then became chief executive of Morrison Knudsen in 1987.

“The problem is, people thought he was a great manager and a great leader,” Fuller said. “But a lot of things haven’t really worked.”