The real question about the cuts is why they did not come much earlier, a question shareholders might want to ask.
An executive at Kraft told Reuters, “We’re essentially taking a white sheet of paper and saying ‘what is the right number of suppliers to support this particular category, who are they, what is the capability we need for now and in the future, and does the current supplier base have that.'”
It took too long to make the decision and the announcement looks bad on the heels of the Cadbury offer. Why would Kraft wait until it had a catalyst like an M&A transaction before paring down expenses?
Kraft CEO Irene Rosenfeld took her job in June 2006. The company’s stock is down almost 30% since then. The elimination of $300 million in expenses would probably have helped earnings over that time period. It is very odd it just occurred to Kraft that it was spending way too much on suppliers.
Douglas A. McIntyre
Top Gaining Stocks
Top Losing Stocks