Question-and-Answer Session
Operator
Our first question comes from the line of Ken Zaslow, please proceed with your question.
Kenneth B. Zaslow – BMO Capital Markets – US
Thanks. Good morning everyone.
Jerry Hostetter
Good morning Ken.
Cory
Good morning.
Kenneth B. Zaslow – BMO Capital Markets – US
You know, just kind of more of a broad question, you talk about a lot of cost savings programs. I was wondering what would it take for you to undergo a major cost restructuring after given that you have these 20 or so operating divisions, 70 or so brands. It seems like it may unleash a lot more value to shareholders if there’s a, you know, a rejiggering, and again, I know I’m the outsider and I don’t know how to run the business. But, it just seems from an outsider’s point of view there may be a lot of costs savings larger than these one or two plant closings.
Jerry Hostetter
Ken, that is something we have probably thought about for over 20 years and there are certainly two ways to run a business. You can have a centralized business and you can have a decentralized business and it always appears when you talk to the consultants whichever direction you, wherever your current structure is, consultants believe the alternative structure is always better. One thing we are very careful about, and if you think about the business for a bit, we have independent operating companies. Parts of the business we control being legal and finance and taxation and certainly control over some of the buying parts of the business in our commodity market activity. But, we want independent companies out there approaching these customers. Because of the product categories and the regions and the brands, we all need to be very careful and there’s a lot of history out there from people who have tried to put it together and it failed. And so, we’re very careful about how we approach the front end of this business as we contact ht customers.
Now, the other side of that is we are looking up, we are looking at the back side of the business and we are in the midst of the beginning process of whether we should combine some of our accounts payable and payroll processes and our IT process. But, we are very, very careful about the front end of this and the other piece of that customers want first, second and third level of a supplier and if we merge companies together we have a very good change of loosing distribution as a result of that. By the customers putting us together and simply reducing our distribution. So, you’re right it’s an easy question and I can understand why you make it and we debate it. But, I think we always come back to, it costs us a little bit of money by our structure but we believe we benefit more by being closer, more flexible to that customer and keeping those brand names alive in the geographic areas they’re strong is worth the cost, more than the cost of the penalty of the costs.
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