The new CEO of Tyson Foods has outlined his strategy for returning the company to profitability, which includes at least US$110m in spending cuts, Tyson officials said today.
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In a video presentation to the company, Richard Bond reaffirmed his commitment to Tyson’s Core Values established by chairman John Tyson, as well as the company’s long-term strategy of creating more value-added products, improving operational efficiencies and expanding its international business.
“I continue to believe our long-term strategies are still very sound and provide us with a focused long-term perspective for the future,” he said.
Bond also indicated the company’s single most important short-term goal is to “return our company to profitability now.” He said: “We must take control of things we know or believe are in our control and get laser-focused on our current business opportunities.”
To achieve this objective, he proposed three measures. He wants the company to return to a “commodity mindset” in its approach to its commodity businesses, create an overall culture of “agility” and improve cost management.
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By GlobalDataWhile Tyson Foods is producing more value-added products, more than half of the company’s revenue is from commodity products, which typically provide a smaller profit margin. Bond said he wants the company to approach this business with more of a “commodity mindset” and “sense of urgency.”
He added that he also wants to create a culture of agility. “In other words, he wants management to focus more time on activities that make money and provide top line growth,” a statement said.
In addition, Bond said he was seeking immediate cost management and cost reduction.
John Lea, senior group vice president and chief development officer, will oversee an initiative to identify at least US$110m in spending that can be eliminated from the company’s fiscal 2007 plan.
Every area of the company will be asked to do an in-depth review of such things as staffing, programmes, reports, information requests, travel and entertainment expenses and consulting fees as well as opportunities for improvement.
The review should take no more than a month, the company said, so managers have a clear picture of the company’s budget parameters as they prepare their plans for fiscal 2007. The new fiscal year begins 1 October 2006.
