Few expect a change in McCormick's focus

July 15, 1994|By Ross Hetrick | Ross Hetrick,Sun Staff Writer

Over the past six years, Bailey A. Thomas was part of a management team at McCormick & Co. Inc. that engineered a renewed focus on its core spice business, producing soaring profits and a five-fold increase in its stock price.

That alone, said company executives and analysts yesterday, is perhaps the best testament to the career of Mr. Thomas, the chairman and chief executive officer who died from a heart attack yesterday at the age of 63. And few expect the Sparks-based company to change course in Mr. Thomas' absence.

"The company has a very strong culture; it has a very deep and experienced management team," said Steven A. Rockwell, an analyst for Alex. Brown & Sons Inc., a Baltimore investment banking firm. "It will be able to continue to grow and improve return," he said.

The company said yesterday that H. Eugene Blattman, 58, the president and chief operating officer of McCormick, the state's third-largest industrial company, has taken over as acting head of the company.

Directors of the company, with revenue of $1.56 billion last year, is expected to meet early next week to start choosing a successor, said Jack Felton, a McCormick spokesman.

"We have a strong succession plan in place," he said.

Mr. Felton declined to say whether Mr. Blattman was the likely candidate for the position of chairman. "It's inappropriate to announce that now," he said.

But based on McCormick's long-standing tradition of promoting the company president to the top position, analysts said Mr. Blattman was considered the most likely successor to Mr. Thomas.

Even before the decision is made, analysts said, they do not expect major changes at the company, which has 7,800 employees worldwide, including about 2,000 in Maryland.

Mr. Thomas -- first as part of the "Buzz and Bailey" team, which paired him with former McCormick Chairman Charles P. "Buzz" McCormick Jr., and then as chairman himself since Jan. 1, 1993 -- is credited with overseeing major financial leaps at the 105-year-old company as it extended its reach around the world.

During his tenure as president and chairman, operating income increased to $99.7 million in 1993, from $36 million in 1988. Stock prices increased over that time from $5 a share to $28 at the end of last year, adjusting for stock splits.

The stock has dropped recently, mostly because of a general decline in food stocks and the fact that McCormick's stock had been run up too high by the market, analysts said.

McCormick closed down yesterday 81.25 cents at $21.1875 a share.

Sweeping changes

As part of the successful team, Mr. Thomas and Mr. McCormick oversaw such sweeping changes as the disposal of the company's real estate holdings in 1989 -- making a $83 million profit -- and cutting the last link to its hometown of Baltimore by closing the 68-year-old building on Light Street.

Through it all, Mr. Thomas was the man who minded the details of the company while Mr. McCormick concentrated on the big picture.

"He was such a wonderful man," said Clifford F. Ransom III, director of special situation research for Raymond James & Associates Inc. in St. Petersburg, Fla. "He was hugely important to McCormick."

He said Mr. Thomas, who started at the company in 1961, was an ardent devotee of the company's policy of "multiple %o management," which sets up miniboards of directors throughout the corporate structure to get employee input into operations.

As a result, the company has been cited as one of the nation's best workplaces in the 1984 and 1993 editions of The 100 Best Companies to Work For In America.

"[Mr. Thomas] was well-informed and as comfortable as an old shoe," Mr. Ransom said.

Mr. Ransom said it was "self-evident" that Mr. Blattman was the heir apparent. "He's a conscientious, bright person," he said. "People up there like him."

Despite the change in leadership, Mr. Ransom does not see any dramatic change in the company culture, which includes a fierce independence.

Continuation foreseen

"I see no reason to see that diminish," he said. "I think it will be a continuation of the same."

The new management will also probably continue Mr. Thomas' aggressive moves into the international market, which has included numerous foreign acquisitions in the past year, according to David S. Leibowitz, managing director for Burnham Securities Inc., a New York brokerage firm.

"They have become far more international and far more aggressive in expanding the core business," he said. But he cautioned that while there would be little change initially, there could be surprises in the future at a "company as dynamic as McCormick."

Mr. Thomas was the first top executive at McCormick to die before retiring since McCormick's founder, Willoughby M. McCormick, died in 1932.

Joins company in 1987

If chosen, Mr. Blattman, a native of Kansas City, Mo., would also become the first executive without decades of company service to head McCormick.

He joined the company in 1987 as the result of McCormick's acquisition of Gentry Foods Corp., based in Gilroy, Calif., where he was president and chief executive of the dehydrated onion and garlic company.

In 1989, he became president of Gilroy Foods -- McCormick's onion and garlic division that absorbed Gentry. Two years later, xTC he was named vice president of the flavor and agribusiness group, and executive vice president and chief operating officer in 1992. Mr. Blattman was promoted to president at the start of 1993.

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