Chiquita Brands Internationals new CEO didnt rule out further job cuts or a future sale of the company as he tries to turn around the struggling banana and produce business, but said his top priority is getting the company back to healthy growth.
I cant give a direct answer, said Ed Lonergan, who started as CEO of the Charlotte-based company on Monday. We feel confident weve got the right resources in the right place.
Lonergan was brought in to oversee the companys ongoing restructuring, in which officials are hoping to save $60 million annually.
Chiquita was lured to Charlotte from Cincinnati last year, in part by more than $22 million worth of state and local incentives. The money is tied to job creation goals. Chiquita initially said it would bring about 400 jobs, about half of those transfers and half local hires.
The company, which has 21,000 employees worldwide, cut 310 jobs after announcing its restructuring plan in August. Only about 15 of those were at the Charlotte headquarters, outgoing CEO Fernando Aguirre said.
Our main job is to grow the business, said Lonergan, who was wearing a small Chiquita pin on his lapel. The companys stock closed up 7 cents, nearly 1 percent, at $7.74 a share Wednesday.
Chiquita will report its third-quarter earnings next month. Lonergan said hes aware that analysts and investors, many of whom were happy to see a new CEO stepping in, expect results quickly.
In business today, you dont get a lot of time to learn the ropes, he said. The company has been in an earnings and revenue slide for several years. Sales fell from $3.5 billion in fiscal 2009 to $3.1 billion in 2011, and profits fell from $91 million to $57 million.
Focusing on Chiquitas core business bananas and salads is a major part of the restructuring plan. Aguirre had said the company would cut its research and development budget and transform to a low-cost, commodity company.
Under Aguirre, Chiquita sought to diversify and add more upscale, branded product lines. Those havent returned the value shareholders expected, Lonergan said. By focusing back on Chiquitas core business, that will enable us to grow the top line.
The CEO is new to Charlotte this week, and is living out of an uptown hotel. He and his wife plan to live in Charlotte. Lonergan said hes still meeting local officials and business executives, many of whom were used to dealing with Aguirre during the citys long competition to win the Chiquita headquarters.
Were doing phone calls with a variety of people who were key to bringing the company to Charlotte, Lonergan said. He plans to meet more of them in person over the coming weeks.
Lonergan will receive a base salary of $900,000, with an annual bonus target of the same amount. He also will receive a restricted stock grant of 231,065 shares, worth $1.77 million at Mondays closing price of $7.68, and stock options to purchase 1,440,062 shares at that price. His stock and options will vest over the next two years, according to securities filings.
Lonergan headed Diversey Holdings, a commercial cleaning products company, for six years. He oversaw a restructuring there that involved steps such as reducing the workforce by 15 percent and outsourcing various corporate functions.
He left the company after it was acquired by Sealed Air for $4.3 billion. Lonergan didnt rule out a similar fate for Chiquita, though he said being acquired isnt his goal. Its always a possibility. In American business, you cant predict anything, Lonergan said.
Although Lonergan was a longtime consumer products executive at Procter & Gamble and Gillette before taking over Diversey, he admits hes brand new to bananas. Wednesday, he showed off his new paperback, Banana Industry Terms and Expressions.
Ive never been given a dictionary on a new job before, said Lonergan.
Aguirre made a splash in Charlotte with appearances at the Chiquita Classic golf tournament, Chamber events and the Rotary Club. Lonergan said he plans to be publicly engaged as well.
But Lonergan said he still isnt planning to join Twitter, where Aguirre frequently posts messages about everything from his morning wakeup time (5:57 a.m. Wednesday) to his love of the Cincinnati Reds.
Lonergan isnt on Facebook, either, but he is a member of LinkedIn, the professional-oriented social networking site. He said that while Twitter and Facebook have become popular in the corporate world, careless online comments can hurt companies.
My job, he said, is not to put the company at risk.