Chiquita to cut 160 managers, trim plants

Fruit and salad distributor Chiquita Brands International Inc., struggling to boost profit amid higher costs and worries over food safety, said Monday that it would cut management and production jobs, close facilities and leave businesses as part of a plan to reduce costs by $60 million to $80 million a year.

The news sent Chiquita’s stock up by almost 12%.

“While we have already taken various actions to strengthen our balance sheet, improve our risk profile and diversify the company, we continue to endure rising industry costs, punitive European banana import regulations and a slower-than-expected recovery in the value-added salads category,” Chief Executive Fernando Aguirre said in a statement.

Chiquita will take a $25-million charge for severance and write-downs this quarter but will begin seeing benefits in 2008, the company said.

Chiquita said it would eliminate 160 management jobs worldwide, a 21% reduction at the three highest levels, and simplify an organizational structure that will be realigned by geography instead of product line.

The company said it would close a distribution center in Greencastle, Pa., and a production facility in Carrollton, Ga., over the next several months as part of a reorganization of its salad business. The plants employ 280 workers.

Chiquita also said it would stop making fresh-cut fruit bowls and convert plants in Edgington, Ill., and Salinas, Calif., to focus on producing and distributing salads and healthful snacks. The conversion will eliminate 130 jobs.

Chiquita said it was also exploring alternatives -- including a possible sale -- for its German fruit and vegetable distributor, Atlanta, which has annual sales topping $1 billion. And it will close a banana distribution center in Bradenton, Fla., which will eliminate 15 jobs.

Analysts and investors welcomed Chiquita’s plans. Its shares rose $2.03, or 11.9%, to $19.04.