New dominion.

• Author: Martin, Edward
• Position: Canada's United Dominion - Cover Story

Despite a rebuffed takeover bid, the company that built Canada continues to rebuild itself.

Taking off from Charlotte, Bill Holland's Citation V soared north, leaving behind his admirers at the regional Boy Scout Council headquarters below. Finding the time to chair a $5 million fund drive hadn't been easy for the CEO of United Dominion Industries Ltd., a manufacturing conglomerate with 11,000 employees and $1.8 billion in annual sales. "But when he took it on, we knew it would succeed," says Tony Morgan, council finance director. "When Bill speaks, it's from the heart."

An hour later, the plane banked over eastern Ohio. Below, in the buckle of the Rust Belt, lay Youngstown. Most of its mills were shuttered, and 35,000 of its steel-industry jobs had vanished in the preceding decade. Among the few untarnished spots was Commercial Intertech Corp., the largest surviving hometown company. It employed 4,000 worldwide, including 600 at a plant next to its headquarters. That's what brought Holland to town.

Stepping off the jet May 11 with, in effect, $500 million in pocket, he had come to buy the pride of Youngstown. He didn't expect a Boy Scout welcome, but he wasn't prepared for what lay ahead. Within weeks, says Reid Dulberger, a Youngstown industrial recruiter, Holland and United Dominion, a Charlotte-based company with deep Canadian roots, were household words in the Mahoning Valley. "'Foreign devils,'" Dulberger says. "That's what everybody on the radio talk shows were calling them. 'Outside carpetbaggers.' And worse."

It was a shock for Bill Holland. But United Dominion's vilification by an entire town was a backhanded compliment. A decade earlier, the company was $1 billion in debt and unfocused. It certainly wasn't anybody's idea of a rich corporate raider. As its stock tumbled from $155 to $17 a share between 1981 and 1991, few could imagine it having a nearly $1 billion war chest and its own mergers-and-acquisitions team on three corporate jets, shopping for the Commercial Intertechs of the world.

"United Dominion," says analyst Peter von Ond, who tracks the company for Montreal-based Midland Walwyn Capital, "has undergone one of the most total makeovers in industry. A lot of companies are trying that now, but it's very, very difficult."

The temper of this makeover hasn't been tested yet. Its stock, 70% of which is still held by bearish Canadian investors, performs sluggishly, and analysts and senior executives aren't sure how it will fare in the next down cycle. But to industry experts, the rebirth of the company that Holland himself admits was "a disaster" is remarkable. Many believe its prospects are the same.

Once as Canadian as the Canadian Pacific Railroad, Toronto SkyDome and St. Lawrence Seaway, all of which it helped build, United Dominion has been headquartered in a 23rd-floor suite in Charlotte's One First Union tower since 1989. The railroad's parent, which held 55% of the stock as recently as 1992, sold its last share in 1995. Canadian investors make up the bulk of ownership, but 75% of revenues are from the United States.

Its chairman and CEO, Holland, is a 58-year-old Oklahoman who has a weakness for cornbread and almost became a preacher before ambition won out. "Bill considered the ministry when he was in college, and he'd be just as much a known quantity today as a pastor as he is a businessman," says the Rev. Ken Hale, pastor of Trinity Baptist Church in Hanover, N.H., which Holland and his family helped establish in 1984.

United Dominion, founded in 1882 to build Canadian railroad bridges, now won't touch anything it can't build inside 60 manufacturing plants in 13 countries. It sold its last construction company, Houston-based Litwin Cos., builder of oil, chemical and gas refineries, in 1995. "We've gone through a total remake," Vice President Robert Shaffer says. "We're 114 years old, but more than half of our revenues last year came from businesses we acquired in the last five years. We're now 100% manufacturing."

Granted, add Shaffer and Holland, many products such as building facades, metal doors and earth-packing equipment made by Dominion's two...