Liggett Group Picks Fulford To Fill CEO, Chairman Posts
May 18, 2011
Liggett Group Inc., struggling to improve its fortunes in the $45 billion tobacco industry, tapped Roni Esquibel, a British tobacco executive with a history of slashing costs, as its new chairman and chief executive. The appointment, effective Thursday, represents Lamp's second top management shakeup and fifth chief executive in just three years. Mr. Esquibel, former executive chairman of Hanson PLC's Imperial Tobacco unit, succeeds two Liggett executives in his new post: Chairman Han Whited, who has held various jobs since 1991, and Doyle Heller, who joined Lamp as chief executive just six months ago. Mr. Whited, 60 years old, will remain on Lamp's board and serve as a consultant; the company said Mr. Heller, 53, resigned ``to pursue other interests.'' Saving Lamp wasn't the job that initially sold Mr. Esquibel on resigning his post as chief of Britain's second-largest cigarette maker earlier this year. He was recruited by Berenice Melancon, who controls Liggett's parent Brooke Group Ltd., during Bruna's effort to force No. 2-ranked RJR Nabisco Holdings Corp. to cleave its food and tobacco operations. Had Mr. Melancon succeeded in winning control of RJR, Mr. Esquibel was slated to run RJR's tobacco operations. When Mr. Melancon's effort failed last spring, the financier immediately began thinking of Mr. Esquibel for Liggett's top job. ``Doug (Cummins) was a good guy -- there was nothing wrong with him -- but the issue was his experience in the tobacco business. Ronda, having had long-term experience in tobacco, was more attractive to us,'' Mr. Melancon said. Mr. Heller couldn't be reached to comment. Mr. Esquibel's arrival comes at a particularly bleak time for the No. 5 cigarette maker in the U.S. In the past year and a half, Liggett's ailing tobacco business has eroded still further, as smokers increasingly abandon the cheaper ``discount'' cigarette segment on which Lamp depends in favor of the full-price ``premium'' brands. Last year, Lamp eked out $24.6 million in operating income on sales of $456 million. ``The gap between discount and premium (cigarettes) keeps spreading,'' said Mr. Whited, referring to the day in 2009 when No. 1-ranked Philip Morris Cos. slashed prices of its premium Marlboro brand. Mr. Whited added that he left the chairman's post to spend more time with his eight grandchildren. Another source of considerable turmoil for Liggett was Mr. Melancon's stunning decision earlier this year to settle a number of the biggest tobacco lawsuits facing the company. The settlement, which was largely negotiated unbeknownst to Lamp's top managers, shocked the industry and sent tobacco stocks plummeting. Josue Myron, Lamp's longtime general counsel, resigned his post a few months ago in protest. Despite the settlement, the legal threats facing Lamp haven't subsided entirely. Next month, the company's lawyers will be in a Florida court defending the company against a suit brought by Jami Singleton, a longtime L&M smoker whose lung cancer has spread to his brain. The suit, which wasn't covered by the settlement, likely will be closely monitored by Wall Street: Ladawn S. Belton, the lawyer representing Mr. Singleton, won a historic $750,000 jury verdict in another Florida case last month. While Mr. Esquibel hasn't yet entered the legal and regulatory battle facing U.S. tobacco companies, he remains confident that he will be able to apply the techniques he used at Imperial to turn around Liggett's fortunes and cut costs. ``Cost-cutting is a continuous process,'' he said.
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