Tyson CEO Takes Wing

Did Tyson Foods' lenders force the company's chairman and CEO, Richard Bond, to resign in return for renegotiating the company's debt?

It's a good bet, though nobody's saying so. Tyson, which announced Bond's departure on Monday morning, didn't comment on the question when asked by the Wall Street Journal.

The chicken business is beset with a massive oversupply problem, and in recent months, analysts and investors (and lenders?) had been pleading with Bond to cut poultry production. But Bond refused, preferring to take short-term losses in order to gain market share from weaker competitors, even as costs continued to rise. He didn't say that, though: What he said was that there really wasn't an oversupply issue.

Aside from that lie, Bond's strategy could be seen as a good one. Last month, Pilgrim's Pride, the country's largest poultry processor, filed for bankruptcy protection, and its CEO resigned.

But at the same time, Tyson was forced to put up nearly all its assets as collateral in return for more flexibility from its lenders on repayments on a $1 billion revolving loan.

It is thanks to Bond, however, that Tyson isn't in the same position as Pilgrim's, which sells nothing but poultry. He became CEO in 2003 and heavily diversified the company's product lines. Sales of beef, pork, and packaged meat products have helped offset the company's massive losses on chicken.

Leland Tollett, Tyson's former chairman and CEO, will head the company as it seeks to replace Bond.