Kraft organizes Oscar Mayer as seperate unit

Kraft organizes Oscar Mayer as seperate unit

Kraft organizes Oscar Mayer as seperate unit

Madison-based Oscar Mayer will become a stand-alone business unit under a reorganization plan from parent company Kraft Foods but officials here aren't yet sure what impact it will have on local operations.

The company -- which has about 2,000 white collar and union employees at its huge plant off Packers Avenue -- recently provided employees with an update on the changes announced in February by new CEO Irene Rosenfeld.

Seeking to revive lagging profits, the world's second largest food company has already eliminated thousands of jobs worldwide. Kraft hopes to increase revenues by 3 to 4 percent and is investing up to $400 million this year in research, marketing and other efforts as part of its plan.

Oscar Mayer has been part of a sector that included pizza, convenience foods and the company's Canada operations. But in early 2008, Oscar Mayer will become one of eight stand-alone business units. Others include Beverages, Canada, Cheese, Foodservice, Grocery, Pizza, and Snacks & Cereal.

Kraft Foods spokeswoman Syd Lindner said today that the new structure would simplify operations and put the company on track for faster growth.

"This will provide greater focus on individual businesses like Oscar Mayer, simplifies our organization, helps us make faster decisions and will bring us closer to our customers," she said.

In the update from Rosenfeld, Kraft said it will eliminate at least another 600 positions worldwide out of its total employment of 90,000.

Analysts have speculated that Kraft might be looking to sell off certain brands as it seeks to become more profitable. Making Oscar Mayer a separate business unit could facilitate sale of that popular brand name.

Lindner declined to predict whether jobs would be eliminated here but noted that Oscar Mayer remains a "core brand" for Kraft Foods, providing over $1 billion in sales for the Northfield, Ill.-based company.

"We have invested $125 million in the Madison plant in the past five years as we've focused on our expanded hot dog and cold cuts operations," she said. "And, in the last 18 months, we've started up a new cold cut packaging area."

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