By Cliff Peale
The Cincinnati Enquirer
With much of the heavy lifting of cutting costs and selling subsidiaries already done, Fernando Aguirre has a clean slate as he steps in to steer Chiquita Brands International Inc. into the future.
Chiquita Brands International named Fernando Aguirre, 46, president and CEO last week.|
(Steven M. Herppich photo)
At least he hopes so.
The 46-year-old Aguirre, named Chiquita's president and chief executive officer Jan. 12, has never worked in the banana business. But he has directed global businesses of nearly the same size at Procter & Gamble Co.
Chiquita believes that, with Chapter 11 bankruptcy in the rearview mirror, Aguirre's experience in marketing icon brands and turning around global businesses is just what it needs to move forward from a troubled past.
"I think this is the next step," said Samuel Shapiro, president of Shapiro Capital Management in Atlanta, owner of about 9 percent of Chiquita's common shares. "I don't know the gentleman personally, but he comes with a good pedigree."
Chiquita has recovered nicely from the bitter days of the 1990s, when it fought European banana quotas and piled up more than $1 billion in debt before filing for Chapter 11 bankruptcy protection in 2001.
Cyrus Freidheim, a longtime consultant at Booz Allen Hamilton, arrived as chairman and CEO on the day Chiquita emerged from bankruptcy in March 2002. Since then, the company has consolidated around its core banana business, and the stock price has responded with a healthy increase in 2003.
Freidheim has clashed occasionally with investors who want to see precise earnings estimates and a quarterly dividend.
But Wall Street types complimented Freidheim last week as he stepped down, cognizant that he had delivered on his promise to get Chiquita past a string of crises.
"I wasn't certain how long the turnaround would take," said Freidheim, who will remain chairman of Chiquita's board of directors. "It came a little faster than I thought. The basic job I came here for has been completed, and now let's go on and make this a growth company."
Aguirre's appointment last Monday wasn't predicted, although it was widely expected that the 68-year-old Freidheim would step down soon. Freidheim said a search firm identified Aguirre early and that he's been in negotiations for several months.
Aguirre said becoming a CEO always was among his career goals. "Running a business is really the fun part of doing business, truly being in charge," he said.
In his comments to Chiquita employees Tuesday morning, Aguirre said the company's headquarters - and about 300 jobs - would remain in Cincinnati.
"There aren't many companies that can claim victory after a bankruptcy proceeding," Aguirre told employees. "I believe you can."
And he tried to assure them that his management style is collaborative, starting with a three- to six-month "listen and learn" period.
His first move was to have the company's chief human resources and information-technology officers report directly to him.
Aguirre will earn a $700,000 annual salary with performance-based bonuses that could more than double that amount.
A native of Mexico, Aguirre has been back in Cincinnati with P&G for nearly five years. He first came to this country as a high-school exchange student, before earning a baseball scholarship to Southern Illinois University at Edwardsville.
The father of two sons is a Cincinnati Reds fan, since the team invited him to a tryout while he was in high school. He told Chiquita employees he's reached the brown belt level in tae kwan do, and he listed among his personal objectives becoming a chef, teaching at a university, writing a book and playing a musical instrument.
But for now, Aguirre is focused on Chiquita.
While the North American banana business is improving, Chiquita still counts heavily on the profitable European market, and there is uncertainty there.
This year's addition of 10 countries to the European Union could help or hurt Chiquita, depending on how quickly the company can move into those countries. And there still is the matter of the EU's long-term import licenses, which are scheduled to convert to a new system in 2006.
The stakes for Chiquita are huge, because Europe has been its most profitable market. And stability in Europe might make it more attractive to investors.
Aguirre concedes he isn't immediately prepared to confront all of those issues, and he elucidated no new plan to investors during a brief Webcast Tuesday morning. But he appears confident that his P&G background has prepared him. Even though he has no banana industry experience, investors appear willing to give him the benefit of the doubt.
"I think they're in the marketing business, rather than the banana business," shareholder Shapiro said.
Aguirre turned around P&G's overall businesses in Brazil and Mexico in the 1990s, then delivered record financial results running the global snacks business. Starting in 2000, he ran the global feminine care business, increasing profit margins in a highly competitive market in which P&G had struggled.
Aguirre speaks English, Spanish and Portuguese fluently, which should be a plus with Chiquita's work force, most of which is based in Latin America.
A student of the business
Aguirre said he studied Chiquita's business before taking the job, and he followed the recovery from bankruptcy closely. The fact that Freidheim has restructured much of the company made it more attractive, he said.
"A couple of years ago, I don't know that I would have made the same decision," he said.
Among Freidheim's accomplishments:
Selling the slow-growth vegetable canning unit and the unprofitable Armuelles banana division in Panama.
Cutting costs and jobs at the Cincinnati headquarters.
Moving toward a global information-technology transactions center in Costa Rica.
Expanding cautiously into other brands with the introduction of fresh-cut fruit, a branching from the company's traditional whole-fruit business.
The fresh-cut fruit venture, Aguirre said, "is right up my alley." "It's another opportunity to move the brand from bananas, which is what most people think of, to something else."
Chiquita's timing is ripe
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