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Will Tim Lindgren Go To China?

The Pundit wishes to extend congratulations to Timothy J. Lindgren, who has been elected as President and Chief Executive Officer of Sunkist Growers, the nation’s oldest and largest citrus marketing cooperative.

Mr. Lindgren had been brought out of retirement to aid in the transition when Jeff Gargiulo, Sunkist’s former President, announced his intention not to renew his contract.

For 26 years, Mr. Lindgren had been President of Fruit Growers Supply, which is an affiliate of Sunkist involved in agricultural supplies, packaging and timberland management.

It was an unexpected choice. Sunkist ran a national search with an expensive headhunter. It spoke to 200 candidates, did multiple interviews with many and ultimately selected the man they had called out of retirement.

The Pundit has previously dealt with the issues confronting Sunkist here, here and here.

Basically, as a co-op Sunkist confronts a great structural dilemma in that its ownership has interests other than increasing the value of Sunkist. I’ve proposed, numerous times, that the solution is to end the co-op and turn it into a stock company. By separating the growers’ interests in their citrus growing operations and the value of their stock in Sunkist, the board of directors of Sunkist would be free to build a much more successful and valuable organization.

Specifically, the management of Sunkist would be untethered from the demands of many specific growers and could act in a way that would maximize the value and returns from the Sunkist brand.

Several of my friends participated in the Sunkist CEO search process and all told basically the same story. At some point in the process, they were asked to evaluate Sunkist’s current efforts and, when they replied that Sunkist was not maximizing the value of its brand and dramatic change was needed, they were never called back.

Only the board knows why it selected Mr. Lindgren. Some claim he is a placeholder waiting to see if some internal candidates are ready for the job in a couple of years. It is also possible that a board of growers who knew Mr. Lindgren for many years liked, respected and felt comfortable with him.

It is fair to say that those who were looking for Sunkist to move ahead progressively are disappointed.

But we have to give Mr. Lindgren his chance. Perhaps he will surprise everyone. Indeed, perhaps only someone from his background could do what needs to be done.

I’m reminded of the Nixon-Kennedy debates. The first televised Presidential debates were heavily dedicated to the subject of whether or not the US would go to war with communist China to protect Quemoy and Matsu — two small islands off the coast of China that are controlled by Taiwan. Nixon was prepared to swear to defend the islands. Kennedy wanted to defend them only in the context of an invasion of Taiwan, then known as Formosa.

It was the pinnacle of Nixon’s anti-communist career, built on fighting communists in the 1940s and 1950s, especially his part in the congressional hearings on Alger Hiss.

As President, when Nixon went to the Peoples Republic of China in 1972 and officially recognized the government in Peking — now Beijing — as the official government of China, Nixon was not vulnerable to attacks from the right that he was soft on communism.

So only the rabid anti-communist could, politically, make peace with the communists.

Perhaps Mr. Lindgren, so close to the grower/owners of Sunkist, is the one who can convince them that their interests lie in separating their ownership of Sunkist stock from their business of selling their crops. If so, he will have provided a value far beyond what any produce marketer could have done.

The China analogy is apt in another way as well. The great strategic issue confronting Sunkist is what to do about massive plantings of citrus in China. Already Sunkist has virtually lost its European outlets. Inevitably this Chinese citrus will drive Sunkist out of its important Asian export markets.

The Pundit has urged Sunkist to open packinghouses in China. It could save the Asian markets for Sunkist, provide inexpensive fruit for sale in Europe and position Sunkist as a multi-national producer.

So as Nixon going to China came to both be a literal, physical step and an analogy for doing what others couldn’t, so Mr. Lindgren has a chance to go to China both literally, to announce a China strategy, and figuratively, to lead Sunkist in a direction that only his long grower-friendly credentials may make possible.

May the wind be at his back.

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