SECURITIES AND EXCHANGE COMMISSSION
WASHINGTON, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): September 28, 1998.
THE GILLETTE COMPANY
(Exact name of registrant as specified in charter)
DELAWARE 1-922 04-1366970
(State or other jurisdiction (Commission file number) (I.R.S. employer
of incorporation) identification number)
Prudential Tower Building, Boston, Massachusetts 02199
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (617) 421-7000.
Page 2
Item 5. Other events.
On September 28, 1998, The Gillette Company announced a
company-wide reorganization, an after-tax charge to earnings
of approximately $350 million and that the company expects
lower third quarter profits.
Item 7. Financial Statements and Exhibits.
99.1 Press release issued by The Gillette Company on
September 28, 1998.
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
THE GILLETTE COMPANY
By: ___________________
John M. Coleman
Senior Vice President and
General Counsel
September 28, 1998
Immediately
David A. Fausch, Corporate Public Relations (617) 421-
7765
Everett R. Howe, Corporate Investor Relations (617)
421-7750
Gillette Announces Reorganization;
Expects Lower Third Quarter Profits
Boston, MA . The Gillette Company announced today that its
Board of Directors has approved a reorganization that
includes a new management structure, a consolidation of
commercial and administrative operations, and a realignment
of worldwide manufacturing operations, resulting in the
closure of a number of factories.
The new management structure will strengthen the Company's
well-established global business management focus for each
of the six core business categories. These six business
management units will continue to be responsible for global
product line strategies, consumer marketing, and research
and development. The new organization will now align
manufacturing and technical support operations under each
core business category on a global basis. These changes will
allow the Company to more effectively leverage its resources
and respond to changing business conditions.
The six global business management units will be organized
under two executive vice presidents.
(More)
<PAGE>
Page Two
Edward F. DeGraan, 55, who currently is executive vice
president of the
Duracell North Atlantic Group, will lead three business
management units - blades and razors, toiletries, and
batteries. Mr. DeGraan, in a previous position, was Senior
Vice President, Manufacturing and Technical Operations,
Gillette North Atlantic Group.
Archibald Livis, 59, recently named executive vice president
for the Diversified Group, which includes Braun, Oral-B and
Stationery Products, will lead those business management
units. Mr. Livis is former chairman of Braun AG.
The consolidation of the Company's commercial operations
will result in five geographic groups organized under two
executive vice presidents. These groups consist of
North America, Europe, Asia Pacific, Latin America and AMEE
(Africa, Middle East and Eastern Europe).
These groups will sell the Company's entire product line
within their geographies. The commercial focus of these
groups will allow the Company to better meet trade customer
needs geographically, while at the same time improve the
Company's ability to more effectively serve global trade
accounts.
Today, for example, in North America there are distinct
selling organizations for grooming products, batteries, Oral-
B, stationery and Braun, each containing its own
administrative support function. The five new commercial
operations groups will be serviced by common administrative
support functions within a geography, resulting in greater
efficiencies and cost savings.
(More)
<PAGE>
Page Three
Robert King, 52, presently executive vice president of the
Gillette North Atlantic Group, which is responsible for the
development and sales of grooming products in
North America and Western Europe, will head the commercial
operations for the
North American and Latin American groups. Mr. King
previously headed the Gillette International Group.
Jorgen Wedel, 50, currently executive vice president of the
Gillette International Group, will head commercial
operations for the European, Asia Pacific and Africa, Middle
East and Eastern European groups. Mr. Wedel previously
headed Oral-B Laboratories.
The four executive vice presidents will continue to report
to Michael C. Hawley, President and Chief Operating Officer.
The consolidation and realignment program will be
implemented over the next 18 months and will result in the
net reduction of approximately 4,700 employees or about 11
percent of the Company's 43,000 employees. The Company
plans to close 14 factories and 12 warehouses and to close
or consolidate approximately 30 office facilities worldwide.
The new organization structure will be effective January 1,
1999, and the initial stage of the realignment program will
begin in the fourth quarter, 1998. These actions will
result in a one-time after-tax charge to earnings of
approximately $350 million or $.30 per share in the third
quarter, 1998. This charge, when combined with the
Company's latest operating profit expectations, will result
in diluted net income per common share for the third quarter
approximating a breakeven.
(More)
<PAGE>
Page Four
"This reorganization, which marks another step toward true
global management of our businesses, will enable us to adapt
more quickly to changing global business opportunities and
conditions. Importantly, it will also facilitate more
responsive global business partnering with our trade
customers. In addition, the steps we are taking to become a
more cost-effective competitor should enhance our ability to
improve shareholder return," said Alfred M. Zeien, chairman
and chief executive officer.
This report contains "forward-looking statements" about the
Company's prospects and progress. Investors should be aware
of factors that could have a negative impact on prospects
and the consistency of progress. These include political,
economic or other factors such as currency exchange rates,
inflation rates, recessionary or expansive trends, taxes and
regulations and laws affecting the worldwide business in
each of the Company's markets; competitive product,
advertising, promotional and pricing activity; dependence on
the rate of development and the degree of acceptance of new
product introductions in the marketplace; and the difficulty
of forecasting sales at certain times in certain markets.
Any such "forward-looking statements" are also qualified by
the detailed comments contained in Item 7, "Cautionary
Statement," in the Company's
most recent Annual Report on Form 10-K, and under Item 5,
"Forward-Looking Statement" or "Cautionary Statement" in the
Company's most recent Quarterly Report on Form 10-Q.
###
