Tyson CEO Confesses Company Culture Was Lazy After Pandemic
"We got fat and lazy," Tyson Foods Inc.’s leader candidly shared about his company’s underperformance in an interview on Tuesday following the opening of Tyson's new $300-million plant in Danville, Va., Bloomberg reported.
CEO Donnie King made comments about the company getting "really comfortable" and "inefficient."
When prices for pork, beef and chicken surged due to demand and supply disruptions during the pandemic, profits boosted for some companies such as Tyson. When demand dropped, America’s biggest meat company was hit hard, the article said.
Tyson's fiscal year ended in September, and the company's adjusted net income plunged 85%, the lowest in more than a decade, with profit margins largely trailing those of publicly traded rivals, Bloomberg reported.
S&P Global Inc. dropped Tyson’s credit rating Tuesday to BBB — the second-lowest investment grade rating — and cited “inefficient production assets” among the factors that contributed to the company’s underperformance in recent years. Corrective measures and investments in more productive assets will help drive profit improvement, particularly in the chicken business, the agency said.
Although the company isn't where it needs to be, King told Bloomberg they are well on their way to being there again.
King was named head of Tyson in June 2021. He first joined the company in 1982. After leaving in 2017, he rejoined Tyson in September 2020.
Tyson will continue expanding capacity to meet growing demand for branded products, such as its Ballpark sausages and Hillshire hams, King said in the article, which typically command higher margins than commodity meat cuts.
