Gillette gets thrifty
Chief executive of the razor and battery maker calls for 'zero overhead growth'
March 30, 2001: 1:10 p.m. ET
BOSTON (Reuters) - More cost cutting and job reductions could be in store for razor and battery maker Gillette Co. as CEO James Kilts called for "zero overhead growth" and further review of overall spending and headcount levels.
Kilts, who was chief executive of food maker Nabisco Group Holdings Corp. before joining Gillette in February, unveiled his zero overhead growth initiative in a letter to employees Wednesday.
The plan complements a restructuring program announced in December that called for cutting 2,700 jobs, about 8 percent of the company's work force, and closing eight factories and 13 distribution centers.
"In order to achieve our no-increase targets, all business units and staff functions will benchmark against peer companies...and will review overall spending and headcount levels," Kilts wrote.
The 53-year-old Kilts is charged with reviving the maker of Mach3 razors, Duracell batteries and Oral-B toothbrushes, whose financial results have lagged consensus estimates for the past 14 quarters.
Kilts said the zero overhead growth program does not involve any preset reduction levels or setting up of new financial reserves. Many units will achieve "negative overhead growth" that will reduce costs from last year's levels, he said.
In a recent letter to shareholders, Kilts said Gillette's general and administrative spending has increased significantly since 1997. In addition, he said, the company's sales per employee are now far below rivals'.
As the head of Nabisco Group Holdings (NGH: Research, Estimates), Kilts secured his reputation as a brand builder, whetting consumer appetites for such products as Oreo cookies and Ritz crackers.
One of his chief goals, he said, is to make Gillette (G: Research, Estimates) competitive with its peers on a cost basis.
"Reducing costs and reducing headcount are not what Gillette is all about," Kilts wrote. "By being competitive, we will be able to invest more in the things that help build our business -- more new products, increased consumer marketing and more effective trade spending." ?
Chief executive of the razor and battery maker calls for 'zero overhead growth'
March 30, 2001: 1:10 p.m. ET
BOSTON (Reuters) - More cost cutting and job reductions could be in store for razor and battery maker Gillette Co. as CEO James Kilts called for "zero overhead growth" and further review of overall spending and headcount levels.
Kilts, who was chief executive of food maker Nabisco Group Holdings Corp. before joining Gillette in February, unveiled his zero overhead growth initiative in a letter to employees Wednesday.
The plan complements a restructuring program announced in December that called for cutting 2,700 jobs, about 8 percent of the company's work force, and closing eight factories and 13 distribution centers.
"In order to achieve our no-increase targets, all business units and staff functions will benchmark against peer companies...and will review overall spending and headcount levels," Kilts wrote.
The 53-year-old Kilts is charged with reviving the maker of Mach3 razors, Duracell batteries and Oral-B toothbrushes, whose financial results have lagged consensus estimates for the past 14 quarters.
Kilts said the zero overhead growth program does not involve any preset reduction levels or setting up of new financial reserves. Many units will achieve "negative overhead growth" that will reduce costs from last year's levels, he said.
In a recent letter to shareholders, Kilts said Gillette's general and administrative spending has increased significantly since 1997. In addition, he said, the company's sales per employee are now far below rivals'.
As the head of Nabisco Group Holdings (NGH: Research, Estimates), Kilts secured his reputation as a brand builder, whetting consumer appetites for such products as Oreo cookies and Ritz crackers.
One of his chief goals, he said, is to make Gillette (G: Research, Estimates) competitive with its peers on a cost basis.
"Reducing costs and reducing headcount are not what Gillette is all about," Kilts wrote. "By being competitive, we will be able to invest more in the things that help build our business -- more new products, increased consumer marketing and more effective trade spending." ?
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