The ballad of Richard Jay CormanMarch 7, 2011: 5:00 AM ET
This Kentucky railroad baron isn't a household name. But his story is one of extraordinary success, generosity, grit, and sadness.
By Carol Loomis, senior editor-at-large
Richard Jay Corman is hardly a household name. But this entrepreneur, a son of Kentucky, has made himself a force in the railroad industry, where in up-from-nothing fashion he has created a thriving, highly respected company. Called R.J. Corman Railroad Group, it's a construction and operating enterprise that takes in around $300 million a year. Rick Corman, 55, is its sole owner. Earnings? He will say only that it's "incredibly profitable." But we'll make an informed estimate: This business, after taxes, has in more than one recent year earned $50 million in profits.
A Kentucky friend of mine, impressed by Corman and aware also that he was facing some complex estate-planning problems, suggested he'd make a good story. You couldn't say the idea was a natural for us: Corman's financial feats, while first-class, don't exactly put him in the Fortune 500 league. Still, Corman seemed worth a trip, so last fall I went to see him in his home state. And well before we finished talking, I realized that he just might be -- apologies here to the Reader's Digest, which popularized this title -- the Most Unforgettable Character I've Ever Met in my more than a half-century at Fortune. That may seem surprising given that I've come to know more than a few standout CEOs over the years. But the emphasis here is on the word "character." In the way he operates -- and faces the world -- Rick Corman is truly larger than life.
And that's not just in business. Corman has also led a kind of soap opera existence, whose chapters he began describing to me in his twangy Southern drawl, and with a startling lack of inhibition, within minutes of our starting to talk. We were at his headquarters in the Lexington, Ky., suburb of Nicholasville, in a small conference room adjoining a cafeteria. He made sure I sat where I could look through a glass wall down to a hangar in which there were parked two private jets and a helicopter, all of them bright red (more on that later). At that moment, I was too obtuse to grasp how unusual those aircraft were. I mean, really, how many red planes have you seen?
Asking a journalist's throwaway kind of question, I said that driving to Nicholasville I had noticed a sign that said REELECT KEVIN CORMAN FOR SHERIFF, and was he related? "No," said Rick, "but if I get into trouble, he will be." And those were the first of many laughs that I got from the very funny and quick Rick Corman, who laughs along at high decibels and loves it.
Hours later, Corman ended our talk with a plan for getting me back on the road. Standing in his red baseball cap and red-and-white corporate jacket outside his red-trimmed glass offices, he told me to drive behind him as he led me to a locked back gate and a shortcut to Lexington. The ride unrolled a pristine scene of success. Ignoring a profusion of red 25-mph signs he himself had ordered installed, Corman raced at twice that speed for more than three miles through 2,000 acres of manicured rolling fields, past red sheds and red work-barns and red bridges and small, shapely roadside maples cooperatively turned, of course, red. In the left sky, a pilot in still another red Corman helicopter was practicing powerless emergency landings on a road. There were two snapshots in white: the three farmhouse rooms that Corman grew up in (and that got indoor plumbing when he was in the fourth grade) and the large frame house, featuring half-octagon windows at the end of recently built wings, that he lives in now.
And as the back gate opened and I started to wave thanks, Corman unfolded his gangly 6-foot-3 frame from his Lincoln Navigator SUV, came to my right window, and said, "I just had to add one more thing: I would not be alive today if it weren't for Kathy Martin."
So, yes, there is a dark side to this tale. Kathleen Martin, a gastroenterologist, is Corman's Lexington doctor. He has an incurable form of cancer: multiple myeloma, which attacks the plasma cells in bone marrow and destroys bones. The disease killed Wal-Mart (WMT) founder Sam Walton, quickly, in 1992. But Corman was diagnosed nearly 10 years ago, when he was only 45. With the aid of two bone marrow transplants, the determined ministrations of both Dr. Martin and Harvard's Dana-Farber Cancer Institute, and the strong will that allowed him to build a major business from scratch, Corman has survived.
You can read about it on his company's website, where Dr. Martin conveys the latest medical news about Corman. Last July, following a period of remission for him, she posted a new report saying that unfortunately a small amount of recurrent cancer had been detected in his bone and that he would therefore undergo new doses of radiation and intensified chemotherapy.
Then, in October, the doctor triumphantly posted "good news." A PET scan had found Corman's myeloma to have again gone into remission. "We remain hopeful," Dr. Martin added, "that new therapies will become available to treat any future relapses."
Since R.J. Corman, the company, has no shareholders to ponder this information, Martin's reports inform and reassure the company's employees and customers -- and even a board of directors -- who know Rick Corman to be the soul of the company. True, he ostensibly retired about 14 years ago when he suffered his third divorce and took over shared custody of his three youngest children, then 6, 8, and 10. His description of life as an idled, single father is that every day he took the kids to the playground and sat there and cried. And that was before he knew he had cancer.
Reports of his "retirement" are, in any case, highly exaggerated. When his storm-team unit won a large and hugely difficult Hurricane Katrina railway-repair job in 2005, he was on site, leading the work, which produced revenues of more than $100 million. "He knows everything that's going on," says W.W. "Half" Halfhill, a close friend. And Corman circulates within the company's offices, and even its cafeteria, like a boss -- "Tell the cook not to fix so much catfish at a time, because it gets cold," he ordered as our interview turned into lunch. Says a veteran Corman employee, Dickie Dillon: "He's the motivator."
Now, deeply aware of the doomsday clock, Rick Corman has the untimely job of planning his company's future. Private equity firms circle, some no doubt figuring they might sell off pieces of the company. But out of loyalty to his 900 employees, Corman refuses to sell.
Instead, he considers alternatives, a subject that inevitably leads to the soap opera part of his life. His two oldest children, a daughter and son who bear his name but were born to a woman he never married, do not seem slated to run the business. The three others -- the ones he once took to the playground -- are still young, only in their twenties. On the other hand, he has a highly competent staff, headed by a talented president with whom Corman communicates with ease: She's 49-year-old Tammie Taylor, dark-haired and attractive -- and Corman has lived with her for nine years.
Corman has a Kentucky expression for almost every situation, including his death. That would be no big deal for the company, he says: "One monkey don't stop no show." But in reality, for the Corman empire, that's as flawed in logic as in grammar.
Corman came from a farm family, which included a grandfather who did odd jobs hauling goods and took Rick in as a 25% partner when he was only 11. A few years later, high school utterly bored him. He got married in September of his senior year and, when she didn't turn out to be pregnant after all, they got divorced. Totally impatient with schooling, Corman missed 105 days out of a scheduled 175 during the 1973 school year but managed to graduate.
Having devoted his days playing hooky to learning the excavation trade from an uncle, Rick rented a backhoe and a dump truck and set out to do whatever jobs he could pick up. The dump truck was red, and that became his color. "You can't be good if you don't look good," he says.
He edged into railroad work, rebuilding crossings and driving grueling distances to wherever the job was, sometimes sleeping in his truck and regularly braving terrible weather. "Railroads don't care -- well, they really can't care -- what the weather's like when something needs fixing," he says. Workers who couldn't take the punishment left. Corman kept making himself the model for doing things right. A "go-getter" by the description of many, including even himself, he steadily picked up construction jobs and gained a reputation for fast, expert service. It also helped that most people simply liked him, sensing his innate intelligence, quickly learning that he was totally honest, enjoying his openness and humor and boisterous, cackling laugh.
In business, Corman was opportunistic. A Columbus company to which the rail industry outsourced some of its derailment business quit the city, and Corman was asked by railroad friends to step into the void. He did, accepting the need to acquire heavy, expensive equipment -- machines that will lift a derailed car, for example, so that the rails beneath it can be repaired or replaced. That naturally led to "crisis" work. "He's kind of like an oilfield firefighter," says Matt Rose, CEO of Burlington Northern Santa Fe, of his friend Corman. "He's the Red Adair of the railroad industry." But Corman also has a hand in more prosaic businesses, such as selling rails and ties to railroads. In effect, he takes on inventory costs they'd just as soon not bear.
By 1984, when Corman was paying 24% interest to finance new trucks, he sought help from Luther Deaton, a lending officer at Lexington's Central Bank & Trust. Deaton, now president of the bank, recalls that "a very self-confident and happy-go-lucky" Corman, then just short of 30, arrived for their first meeting wearing boots, khaki pants, and a big belt buckle flashing his initials, and with no financial statements in hand. "I just couldn't get comfortable with him," Deaton remembers.
Deaton stayed skeptical until Corman got him to visit a couple of work sites -- "to see what we do." On his first visit, to a sprawling Baltimore & Ohio wreck, Deaton saw shiny red trucks and bulldozers and watched Rick work atop a railroad car, rigging cables to start pulling derailed cars out of a tunnel. Next, on a deathly hot August day, Deaton drove to see a stretch of railroad being rebuilt. Deaton found Rick pulling up spikes so that track could be re-laid, while sweat poured out of the top of his work boots. Explaining to Deaton that he couldn't right then talk to him, Corman said that if he got the job finished by midnight, he would get a bonus and in turn be able to pay bonuses to his workers -- those remaining, because several had quit during the day owing to the harsh conditions.
Deaton went home, comfortable, and says he told the president of the bank, "Look, we've got to help this guy. He knows how to get it done. He's free to go be a great success," and the boss said, "Do it." The next day, a Saturday, Deaton found Corman sitting in the engine he used for an office, with blisters on his feet visibly oozing. Deaton cut his interest costs on the trucks to 14% and offered him a $500,000 credit line. "We've never looked back since then," says Deaton. "He's a banker's dream." Translation, according to Deaton: Corman is a brilliant businessman who borrows frequently, but is conservative and always good for his debt.
Corman's improved financial position helped set him up for his biggest opportunity, which materialized when the passage of the deregulating Staggers Rail Act of 1980 caused the industry to gradually reshape itself. Many railroads sold off their "short lines," usually meaning rail lines of 100 miles or less. These were like baubles to the trunk lines, but they were nice baubles, being monopolies (as is the case with almost all railroads), except for competition from trucks.
Corman got in this game when a Seaboard System executive who took to Rick said, "I'm going to sell you a railroad." And that's how it happened that Corman, in 1987, paid $300,000 for a 20-mile line in Kentucky, the first of eight short lines, covering about 620 miles, he picked up. Naturally, the engines on these lines are red. On the profit side, though, the short lines began to deliver very black profits, becoming Rick's biggest moneymakers.
Then came the cancer. It revealed itself in the spring of 2001 in Amsterdam, where Corman, generous to others all his life, had taken a group of friends and relatives to see the blooming of the tulips. He was running in a park one day, when another runner passed him doing 5½-minute miles. Corman immediately tried to match the pace. Within minutes he was brought to his knees by excruciating pain in his back.
Managing to get home to Kentucky, he got two doctors on the case. One, his family internist, Terrance Furlow, ordered a blood test and a bone biopsy that strongly indicated multiple myeloma. The other doctor was Kathleen Martin, a tall, striking blond whom Corman had dated until they had recently broken up in a friendly way. Corman knew the woman he calls "Kathy-leen" to be a dedicated patient advocate. "There's no dam big enough if she's the beaver," he says, speaking Kentucky. He wanted her at his side as he dealt with his illness, and that's where she has been for nearly 10 years.
Dr. Furlow sent the two of them to the Mayo Clinic for a bone marrow biopsy and a confirming diagnosis. There, Dr. Stephen Ansell, a hematologist, told Rick soberly, "It is myeloma. It's not curable, but it's treatable."
Rick said: "Well, there are worse cancers than this, right?" Neither Ansell nor Martin spoke. "It seemed like a year passed," Corman recalls, "until finally both came up with pancreatic cancer." He said at least it was good to know there was a worse one. But by that time he was breaking up with laughter at their halting answer -- and so were the doctors. "It's a gift of Rick's," says Martin. "He gets people to laughing no matter what."
Dr. Ansell said that without treatment Rick might have a year to live. Rick instantly became a fan of treatment. Dr. Ansell allowed that a bone marrow transplant, which he suggested be done at Mayo, would reset the clock and possibly give Rick three years. The doctor added that Rick should focus on spending his money and enjoying life. "The message," says Rick, "was that my life was going to be short."
After that meeting, Corman and Martin, in effect, shopped for time, hoping to find a specialist who might visualize a better outcome. At the University of Arkansas for Medical Sciences, a center of myeloma research, doctors said the right treatment could give Corman seven years. And then he and Martin went to Boston's Dana-Farber, whose myeloma chief, Dr. Kenneth Anderson, looked down at Corman's file and said: "I see you're 45, Rick. I'm surprised that you'd be satisfied dying at age 52. If you come here, we will do everything possible to see that you grow old gracefully and die of something other than multiple myeloma."
And thus was struck a memorable bargain, for both sides. Against terrible odds, Corman has survived; Dana-Farber has received millions for the R.J. Corman Multiple Myeloma Research Fund, most of the money contributed by Rick, some by friends of his. He told Dr. Anderson at the outset: "Every year you keep me alive, Santa Claus will visit you." Corman proceeded to deliver Dana-Farber at least $250,000 each December, usually in packs of $100 bills (though he has stopped the cash deliveries because of security concerns) that he ostentatiously plunks down before his doctor, Paul Richardson, and other staff members. And Rick would say, "Don't forget that this won't be coming if I die."
Dr. Richardson, 48 and internationally known for his work on multiple myeloma, has done his part by cycling new and improved drugs (some developed at Dana-Farber) into the oral and intravenous "cocktail" that Corman takes. Dr. Richardson says he and Dr. Anderson have "kind of taken this disease by the scruff of the neck and given it a damn good shake."
Richardson's affection for his patient has in the interim grown so deep that he never runs out of praise for him. He watched Rick give $12,000 to a cancer patient he didn't know for a transplant that might otherwise have not been performed. Every week Rick funds a group luncheon for Dana-Farber's doctors, picking up the check because the institute's rules won't let it pay. "Rick is a profoundly good man," says Richardson, finding him a remarkable mixture of "humbleness and -- I don't say this lightly -- greatness."
Richardson does not talk, meanwhile, of a cure because there isn't one. Richardson says, "I hope -- well, actually I pray -- that he can have another five to 10 years." Rick, not much into religion, says simply of his prospects, "If you make it to tomorrow, you've done good."
All of Corman's doctors agree that he has come this far by keeping himself remarkably fit. In 2002, five months after his first bone marrow transplant, Corman ran the Boston Marathon to aid a cancer fundraiser. He still runs five kilometers almost every day, but his illness has caused his pace to slow, from maybe 19 minutes for the distance to 27. The drugs he takes also have intermittently caused him intense, neuropathic leg pain, which he sometimes can ease only by elevating his legs above his heart. He often does that in deep La-Z-Boy recliners at home, in a space once called the living room and now christened the "cancer room."
The discovery of his illness brought about large changes in both Rick's business and personal life. Dr. Richardson asked to see Rick frequently in Boston, which raised the threat of commercial flights exposing him to germs. No problem: Rick (a pilot himself) constructed a city-airport-size 5,600-foot runway on his property. For transportation, he bought two planes for $12 million, a Challenger and a Learjet, naturally decking them out in his color. That move was automatic, even though a dark paint like red increases operating costs -- absorbing heat, for example, and making the plane more difficult to cool. That's a reason, folks, you do not see many red planes.
Though turning his grounds into an airfield kept Rick busy, he wasn't spared periods of great sadness and despair about his illness. On one 2001 Friday night several months after it flared, with his young kids away at their mother's, he phoned Tammie Taylor, then the chief of one of his company's divisions. Finding her at the office, he asked her to come the short distance to his house. "Why?" she asked. "Is anything wrong?" "Please just come," he answered. When she got there, he says, he was "sitting there bawling." To her anxious question, he said simply, "I'm scared." Things moved on after that in quite a remarkable way: Taylor stayed that night, and she's been there ever since.
As a manager, Taylor wins Rick's ultimate accolade: "She's a go-getter" (a description that, were it in a thesaurus, would be in the vicinity of "industrious"). But she is the first to say that the secret of R.J. Corman's success is, simply, Rick. She spends her days, in fact, trying to hire people who will bring his kind of "passion and pride" to their work.
And what is to happen when Rick -- this inspirer and motivator -- is not there to keep that culture going? The legal answer is that a trust will take over ownership of the company. It will exist for a near-unimaginable 200 years and is likely to have Dana-Farber as its ultimate beneficiary. A handful of trustees will run it -- people that Rick knows well and indeed trusts -- and they will be paid handsomely, probably dividing one-fifth of the company's pretax profits. That would be big money. But Rick expects the trustees (who could include some of his children) to devote all their might to preserving and building the company. And if they do that, the price will seem cheap to him. All the while, Rick says, Tammie Taylor and her staff will run the company and can be expected to do it very well.
He does not rule out the possibility that eventually one or more of his children will move into management, though at the moment the three oldest have careers that are not headed in that direction. Amy, 33, is a marketing analyst at a Lexington uniform company, Galls; Richard Jay, 30, is an associate dean at Lenoir Community College in North Carolina; Jay Richard, 24, drives a tractor-trailer for R.J. Corman. The other two children are Ashley, 22 (called by her first name, Shawna, by everybody but Rick), and April, 21. Both, Rick thinks, might have the "capacity" for running a business. Each, though, has entertained the thought of becoming a doctor. Ashley is currently a clinical research coordinator at Dana-Farber and a student of her father's disease. April is a junior at Transylvania University in Lexington.
Dale Hawk, formerly a CSX (CSX) executive and today an R.J. Corman director, says Rick's kids will undoubtedly have to earn their way into management if that's where they'd like to be. Right now, he says, the company is well established and will endure if Rick dies. But he also acknowledges that it will miss Rick's flair and the personal relationships that he has in the railroad industry. "The company will go on," he says, "but it will never be the same without Rick."
After my long Nicholasville interview with Rick, I saw him three times more. In November, I traveled with him and Dr. Martin to Dana-Farber. As we waited in a corridor, every doctor who passed greeted the two warmly. One doctor, a Kentuckian himself, joked with Rick about the next bone marrow transplant he might need, saying it would undoubtedly be easy to find a donor of cells "because we know that all Kentuckians are related." ("Oooh, be careful," said Rick. "Mrs. Loomis, here -- she's from the press.")
I next saw Corman twice in New York City. On a Monday he unexpectedly dropped by my office to introduce me to the University of Kentucky's famous basketball coach, John Calipari. The two men had flown to New York for the day to shop at Brioni, the upscale tailoring establishment that makes Rick's flamboyant, double-vent red sports jackets. I thanked Calipari for a favor he'd done me. There had been a time, early on, when Rick thought he might not cooperate with this article. But friends had talked him into it, among them Calipari, who argued, "Somebody reading it might be inspired."
In my other New York visit with Rick, he came to breakfast at my office cafeteria in December so I could do a little wind-up reporting. Heads turned to marvel at his jacket as we stood waiting for our bacon and eggs. He was in Manhattan to take 130 people to the Radio City Christmas show and then to dinner at Del Frisco's, an expensive restaurant nearby.
On that Friday morning he had the look of invincibility that appears to have characterized him all his life, but that sometimes, as you've read, is stripped away by sadness. Even so, Rick Corman had made it to that December day and to the others that passed before this story closed some weeks later. He'd "done good," by his way of reckoning. You can't help but feel that he will keep on beating the odds. And, when his luck runs out, the word will go up on the company website, and the world will have lost some of its style.
It's in the details
Richard J. Corman explains to editors Carol Loomis and Hank Gilman how he was able to better understand his own personality by observing a plate of chili.
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