Groseclose resigns as CEO of State Ports Authority

By Molly Parker
mparker@scbiznews.com
Published Jan. 20, 2009

Bernard Groseclose announced his resignation today as chief executive of the S.C. State Ports Authority during a closed executive meeting of the board.

Despite his abrupt departure, which is effective immediately, both Groseclose and board members said the resignation was voluntary.

"I’m sure that would have been handled differently had it been an ultimatum," said Groseclose, who has overseen the port as president and CEO since mid-1996. He joined the port 10 years prior as manager of business analysis and later served as director of planning and development.

After 23 years with the SPA, Groseclose said he "no longer found the job to be as rewarding as it once was."

"I think everybody ought to have fun and enjoy what they are doing or look for something else," he said. "I wanted to find something else of value to do."

Port turmoil
The Port of Charleston — one of the state’s most powerful economic drivers — has in recent months has been the focus of intense scrutiny as container volumes have fallen and Maersk Line has announced it will be departing from Charleston when its contract expires at the end of 2010.

Much of that scrutiny has been targeted at Groseclose. His detractors accuse him of poor community and industry relations dating back to the failed Global Gateway project slated for Daniel Island, and for his refusal to bend on political calls to privatize the port.

Gov. Mark Sanford was one of the loudest voices calling for privatization of all or portions of the port and moving toward a model that is the norm across the nation.

In South Carolina and Georgia, quasi-state entities manage port operations, but, in most states, the infrastructure is owned by a public body and the day-to-day operations are managed by a private company using labor from the International Longshoremen’s Association. Groseclose and others have maintained that South Carolina’s model gives the state a competitive edge. 

Governor supports resignation
Sanford spokesman Joel Sawyer said the governor did not seek Groseclose’s resignation but that it was "not unexpected given recent news." 

That list of "recent news," Sawyer said, included Maersk’s announcement to leave, a drop in container traffic and the controversial bonuses recently awarded to port executives and rank-and-file employees for meeting pre-established performance goals. Groseclose received a $27,000 bonus on top of his $264,000 annual paycheck. His bonus was the largest.    

"We do fully support the board in their decision and will be taking an active role with the board members to find a replacement," Sanford said. "We believe this does represent an opportunity because we believe private investment will be the only way to be competitive."

Governor, union agree
On this point, free-market Republicans such as Sanford and union representatives find themselves in a rare place: on the same side of a debate.

Ken Riley, president of ILA Local 1422, called Groseclose a "nice enough guy" but said the two differed philosophically about how to best move the port forward, including on the issue of privatization.

"I hope this gives us the fresh start we’re looking for," Riley said in a phone conversation from Washington, D.C., where he was attending the inauguration of President Barack Obama. "I can’t envision that the board would select someone without the energy and compassion and readiness to take on and turn around a port and get it back to where it needs to be."

Senate President Pro Tem Glenn McConnell also has been calling for privatization studies but said he is waiting to find out whether this move signals a change in direction for the board. After all, McConnell said, the executive director serves at the pleasure of the board members, which are appointed by Sanford.

"With change under way at the port in personnel, that is about personality over who will head up the port," McConnell said. "What I’m waiting to see is if the board is going to change its policy and put an emphasis on jobs and economic development rather than just the bottom line for itself."

Chairman: Groseclose not ousted
As the board looks for a new chief executive, SPA board member John Hassell has been named to serve in the interim. Hassell said he will temporarily step aside from his role as president of the Maritime Association of South Carolina, a position he has held for 15 years, and refrain from voting on board matters during his tenure. He plans to remain a member of the board, however.

"We knew that it might happen, and I was asked if I would do it if the situation ever came about," Hassell said. "I can’t say that it hit me for the first time today, but today was the first time the board asked me to do it."

Board Chairman David Posek called Groseclose’s departure "sad in one sense" and applauded his leadership over a port he called "the most efficient in the nation" with regard to its turnaround time for customers.

With Groseclose at the helm, the port has experienced significant growth since 1996. Revenue has increased from $71 million that year to $165 million in the 2008 fiscal year. Container cargo volume increased from 1.1 million 20-foot-long containers to 1.69 million. The annual value of cargo shipped has grown from $27 billion to $61 billion. Nevertheless, Charleston has slipped behind other East Coast ports, namely its rival competitor, the Port of Savannah. 

Asked about the nature of Groseclose’s resignation, Posek said, "I don’t think there’s any productive nature in speculating on that; he just turned in his resignation, and that’s what we reacted to."

Pressed again as to whether Groseclose’s resignation was forced, Posek said "no, absolutely not."

Still, others in the maritime community had a hard time buying that. Pat Barber, chairman of the Charleston Motor Carriers Association’s board, said, "There’s no doubt in my mind this was politically motivated." He praised Groseclose’s leadership and said "that good effective leadership is measured in the downturns."

"I think he’s a scapegoat, and I think everybody was looking for a scapegoat," Barber said. "We’ve lost a good man, but we need to move forward. We’ve got a great port, and we need to continue to promote that port. He’ll land on his feet."

Reach Molly Parker at 843-849-3144.

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Comments:

Added: 20 Jan 2009

Someone had to take responsibilty for the recent loss of business

Robert Kosian


Added: 20 Jan 2009

The State government of Georgia did a bit better in the last decade by building platforms that brought companies like Walmart and Target to using their port. The State government of South Carolina may deserve some credit if the SCSPA's business has declined.

Andre


Added: 21 Jan 2009

Bernard Groseclose did an excellent job as CEO of our SPA as your statistics pointed out in the 9th paragraph. Even in a declining market Charleston still posted a profit. His salary was commensurate with the job and as such his bonus was a pitance compared to what the private sector would have paid for a profitable Port in declining volumes. Making the Port private was not up to Mr. Groseclose, it was the system that he inherited and the legislature makes that call, not the CEO. How do you constantly compare the Port of Savannah so positively when they run their Port the same way. If anything, Mr. Groseclose should be thanked for putting up with the constant efforts of the Coastal Conservation League to thwart every move the Port tried to take, especially when the changes were the ones that the CCL suggested in the Navy Base case. I can clearly understand why his job wouldn't be enjoyable for him anymore, we are blessed to have had his leadership all these years. If Gov. Sanford is glad Mr. Groseclose is leaving then it is a sure thing that it is bad for S.C. When the "mistaken partnership" of the Port of Jasper and Savannah" gets rolling we will sorely miss the economic benefits that the Port of Charleston gave us and we may then remember Mr. Groseclose in a more positive manner. I wish Mr. Groseclose the very best and Good Luck to the person who has to fill his shoes.

Richard White


Added: 22 Jan 2009

Hopefully this will signal a move to privatization. There's no need for taxpayers to continue to bear the burden of an inefficient business model not to mention the new construction costs of the Jasper Port, too!

Scott