BEECHAM PRODUCTS USA RESTRUCTURING STUDY NEARING COMPLETION;

Executive Summary

BEECHAM PRODUCTS USA RESTRUCTURING STUDY NEARING COMPLETION; results will determine the management structure of the merged Beecham Products/Norcliff Thayer unit and the location of headquarters. The firm authorized an "intense study" of the issues by the McKinsey consulting group in September, according to Beecham Products USA President Charles Pergola. The study could be completed by year-end. The study began soon after Pergola's appointment to the top spot of Beecham's U.S. OTC drug and toiletries firm. The promotion of the former Norcliff Thayer president was the first move in the merger of two reporting structures. Beecham Products is headquartered in Pittsburgh. Norcliff Thayer management operations are located in Tarrytown, NY. Since Beecham Products' British parent acquired Norcliff Thayer from Revlon in 1985, the company has operated as a relatively independent unit. After Beecham bought Norcliff Thayer, there were no wholesale exec changes. In at least one previous Beecham acquisition, the new owner made widespread personnel changes. Following the 1982 acquisition of Nabisco's J.B. Williams subsidiary (Aqua Velva and 'Lectric Shave), the company immediately dismissed 90 top Williams execs. The favored status of Norcliff Thayer within Beecham is generally attributed to Pergola's representations after the 1985 acquisition. Norcliff Thayer's success with Tums has also bolstered its profile within Beecham. In a harbinger of the merger changes, one long-time Beecham Products veteran exec has recently resigned. Exec VP of Sales, Marketing and Distribution Robert Lancaster has left the firm. A spokesperson for Beecham Products noted that when two companies merge there are "redundancies." A decision on whether to fill Lancaster's position will depend on the outcome of the restructuring study, the spokesperson indicated. Lancaster joined Beecham in 1975 when the firm bought the Calgon bath products business from Merck. A recently completed Beecham headquarters in Pittsburgh houses approximately 380 employees. Norcliff Thayer's offices employ roughly 85 people. Together, the two units manage Beecham's Massengill, Aqua-fresh, Aqua Velva, 'Lectric Shave, Sucrets, Vivarin and Calgon OTC and toiletries brands, and Norcliff Thayer's Tums and Oxy lines. Beecham Products has manufacturing plants in Clifton, NJ, Rockwood, MI and Aiken, SC. Norcliff Thayer products are produced in St. Louis.