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TheGerbil

This bugs me

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http://www.post-gazette.com/pg/06143/692442-100.stm

Billionaire Nelson Peltz and the activist investor group he heads laid out a plan for rejuvenating H.J. Heinz Co. today, saying management of the Pittsburgh ketchup company has "destroyed" shareholder value by spending millions on at least five major restructurings, "each failing to produce meaningful results."

Didn't this guy JUST buy a bunch of stock? I know this is how things work, but his attitude angers me anyway. He is just some guy who bought a bunch of stock. Before that he had nothing to do with the company. Yet he acts all high and mighty, telling them what they have done wrong and how they have devalued their stock, as if he were somehow affected.

I am glad, however, that he says he has no intention of moving the company.

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He better not move Heinz! Losing Alcoa to New York was bad enough, even if their corporate center is still here! The fact that he even mentioned it bugs me, as I interpreted it as that it remains a possibility though he will try to avoid it.

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Peltz, if he mean what he says--and they rarely do--doesn't bother me. Gerbil you say you know how these things work, but I think most fail to realize how new and uninvested most of these CEOs and members of the board are at Heinz, Mellon (just brought in a new CEO from TDAmeritrade!?!), etc. etc. Corporate America is one big job merry-go-round, one day your fighting for Pepsi a few years later you're in Atlanta at a comp-ed luxury suite watching the Braves and fighting for Coke. Peltz at least is putting his money where his mouth is and putting more then his cred on the line, he is putting his personal fortune on it.

Only drawback with that is usually these raiders are looking to turn a quick buck and the way that is accomplished is they sell out to Kraft or ADM or Cambell's at some premium price. As long as Peltz is in this for the long haul I think it can only be a good thing, that is if we trust what he says.

~~~~

What disturbs me EVEN MORE is what is going on with Rolling Rock! I hope BUD comes to their senses and keeps Rolling Rock in Latrobe instead of farming it out to some superbrew in Jersey :(.

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From what I have read, Peltz's group goes around buying a stake in large companies and then pushing for big changes. They did it to Wendy's already. They're in it for the money.

Now maybe the changes they push for will be good. But what scares me is that they will probably do whatever they have to in order to improve stock prices, so if that means selling out I am sure they would. It bothers me that anyone with enough money can come in and have so much influence over a company, even if they don't care about the company or its traditions (or its workers).

And yes, I too am very concerned about the Rolling Rock thing. Sometimes I feel like every time this region grows a good local company, someone swoops in and buys it. Of course I know that isn't always the case, but it often feels that way when stuff like this happens. -_-

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G, I know where your coming from on this.

Consider though, this might be before some of ours time (mid 80s) but it was one that I studied very deeply. Gulf Oil was once the 8th largest private concern in the world--a few years before it was the victim of the largest takeover in world history up to that time. How can a company the present day size of Wal-Mart like proportions just be taken over and chopped into bits? Gulf was such a sad sad case, because it was a huge industry in Pittsburgh (the vast Harmar UPMC and labs center were once it's global research facility), but the crux of the Gulf matter was that entrentched "oil men" that merry-go-round from one oil company to the next every 2-3 years ended up running things at the oil giant, and then ended up kicking the Mellons and their people off the board, even though the Mellons retained the greatest steak in the company, greatest "put your money where your mouth is" "walk the walk" risk in the company?!? Mellon it was found out much later was the chief backer of raider T. Boone Pickens in his bid to buy Gulf and run it as a Pittsburgh company, I guess if you are locked out of your investment you put any more money at work trying to get it back. What destroyed Gulf was not the raider with lots of "other peoples money" behind him for the coup but the oil patch guys from Texas, Oklahoma and Cali that although they had no real steak in Gulf were running it similar to a bunch of well paid bureaucrats that really only care about their resume for the next oil job. These "leaders" of the proud Pittsburgh institution ended up calling up their merry-go-round partners at Chevron and let the Cali oil giant swallow them whole. In the corporate board room of Gulf it was better that there buddies and once and future Exxon-Amoco-BP-Texaco-merry-go-round co-workers took them then a raider who promised to keep the company in Pittsburgh, healthy and growing but WITH a steak of the company, with a VESTED interest in it, unlike the bureaucrats that these CEOs and like too often become. In this way Peltz is a breath of fresh air, Heinz though a big boy around here is a joke in Wall Street circles, O'Riellys act was wearing thin in the last few years and Johnson seems to always have blood in the water in the shark tank known as American highfinance. In this case major changes were bound to happen, either from an inside shareholder revolt (always exciting) or a raider, or a hostile takeover from Kraft or Campbells or P&G etc. Peltzer kept all the traditions at Wendy's and left the company much much better. Again many of these so called "CEOs" and leaders of the "company tradition" are like Gulf Oil's were one year the COO for Texaco, the next year the CFO of Exxon and the year after that flying to Pittsburgh to be the CEO of Gulf Oil, they rarely have much more then their job title at risk if the company goes south, and they have as much to do with Pittsburgh as Peltz would. At least Peltz talks the talk but then--with his own billions--walks the walk. Now he might indeed sellout to a Kraft or P&G and if he does he is a fool, but his track record speaks that he is a fixer of companies not a broker of them.

The Rolling Rock thing is a bit different, they have been owned by Moulson/InterBev for decades now (that's why they always seem to have endless supplies of marketing and placement $$, it's big daddies credit card they are using lol), since they were owned by a foreign company RR pretty much were they're own shop as long as they made money--which they did well. BUD should wise up and see that the VALUE in RR is the homespun, carefully crafted, bluecollar image it projects from "Latrobe, PA" and not integrate it with its massive US infrastructure (currently slated for Jersey). InterBev/Moulson never had that so they were more then happy to keep everything exactly like it was in Latrobe since 1933--except of course sales figures, which grew exponentially with they're massive domestic and international sales channels.

Interesting to see if BUD comes to their senses and relents to let Latrobe keep their tradition like Moulson/InterBev did.

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It seems to me it would make sense to have RR continue as is - self-contained. This will maintain the individuality of the product and not disrupt flow or increase cost to creat the production somewhere else (I realize that this is a one time ordeal, but still).

I know it's not personal - well not personal to Busch, but I saw if they close the plant screw 'em.

I can't stand Bud and it was an additional insult that RR will be part of that group of "beers"

As for Heinz, it's just some idiot trying to stir things up.

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here's an update on the Heinz situation:

http://pittsburgh.bizjournals.com/pittsbur...ml?surround=lfn

Peltz I think is waking them up over at Heinz, I think the company has been resting on its laurels for far too long since O'Reilly left and even during his tenure things were progressive but extravagant. Heinz when compared to technology drive, nimble and super efficent companies like Southwest, AMD, Wal-Mart or Starbucks.

Think of everything Dicks and American Eagle Outfitters have done in the last decade, they have gone from regional competitors to the world's leader in their market segment and competitive forces to be contended with on a super regional scale. Heinz needs to sweep out the cobwebs from the last 10 years compared to that.

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As long as no jobs are moved out of the region I am happy to see positive change at Heinz. My biggest fear is that someone with no real connection to the company or city would move jobs away. But I guess it is good for them to have a bit of fire under their bums. :)

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^^G, can you imagine how that would smell down 7th Avenue? :P

I am fearful that Peltz does value the $ more then loyalty to Pittsburgh, but I think the C's (eo, oo, io, fo) aren't much better, they are mostly hired guns by the board. What is troubling though is that even if Peltz wants Heinz to stay here, you could get a tradegy of good intentions going past each other, similar to Gulf Oil wanting to stay here and Boone Pickens saying he wanted it to stay only to have a keystone copesque scramble in the final days brought on by ego shipping the company off to San Fran and what became Chevron.

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