May 29, 2006

Tyson CEO proposes to cut US$110 million in spending  

Richard Bond, the new CEO of Tyson, outlined plans to return the company to profitability through a US$110 million cut in spending, according to a Tyson news release.

Bond also reaffirmed the company's long-term strategy of creating more value-added products, improving operational efficiencies, and expanding its international business.

The company's most important short-term goal is to return to profitability, Bond declared, adding that the company would be focused on current business opportunities.

He plans to bring Tyson back to profitability through three measures. The first is to adopt a "commodity mindset" in its approach to its commodity businesses.

The second was to create a culture of "agility" whereby management would focus more time on activities that make money and provide top line growth. While Tyson Foods produces value-added products, more than half of the company's revenue is from commodity products, which has smaller profit margins.

The third measure involves immediate cost management and cost reduction.

He has asked John Lea, senior group vice president and chief development officer, to oversee an initiative to mark out at least US$110 million in spending that can be removed from the company's fiscal 2007 plan.

All departments would be asked to do an in-depth review of its operations and expenses.