McDonald's faces abrupt transition after chief executive's death

<br>CHICAGO (AP) _ After the successful turnaround of its U.S. business, McDonald's Corp. faces a new challenge: a young and unproven leader put in charge after the sudden death of CEO Jim Cantalupo.

Tuesday, April 20th 2004, 12:00 am

By: News On 6

CHICAGO (AP) _ After the successful turnaround of its U.S. business, McDonald's Corp. faces a new challenge: a young and unproven leader put in charge after the sudden death of CEO Jim Cantalupo.

Charlie Bell has risen impressively within McDonald's and helped craft the strategy Cantalupo, 60, employed to revive its flagging U.S. sales and performance. But after spending most of his career in regional posts in his native Australia, the 43-year-old Bell must prove himself quickly in a job he was elevated to ahead of schedule.

Analysts and franchisees attending the McDonald's convention in Orlando, Fla., where Cantalupo was stricken with a fatal heart attack, voiced confidence Bell will be able to keep the world's largest restaurant company on the upswing. Nonetheless, a nearly 3 percent drop in the stock price showed shareholders have a wait-and-see outlook.

``As far as day-to-day operations, it's not going to affect anything,'' said Stephen Dietz, who owns six McDonald's restaurants in Biloxi, Miss., and has been involved with McDonald's for more than 40 years. ``Everything is going to go on like it has.''

Added his wife, Jane Dietz: ``It's hard to lose somebody like him (Cantalupo) but it's a big company and they'll go on. ... It's the front counter where it counts.''

It was a focus on the front counters _ a back-to-basics approach emphasizing more efficient operations and swifter service _ that enabled more than 13,000 U.S. McDonald's under Cantalupo to lift sagging sales and revive a lackluster brand.

The fast-food giant slowed its breakneck expansion pace and sharply boosted U.S. sales with help from three new products _ entree-sized salads, McGriddles breakfast sandwiches and white-meat chicken nuggets _ as well as by keeping more of its domestic restaurants open late at night.

The company reached out to younger consumers with a new global advertising campaign and the tag line ``I'm lovin' it.'' It also has been trying to attract more diet-conscious consumers with not only its salads but last week's announcement that it will introduce adult Happy Meals, featuring salad, bottled water and a pedometer, and fruit and lower-fat options for its kids' Happy Meals.

The yearlong surge means Cantalupo leaves Bell ``Ronald McDonald-sized shoes to fill'' and a turnaround to complete, according to analyst Peter Oakes of Piper Jaffray & Co.

Independent consultant Dick Adams, a former McDonald's franchising executive, said the jury is out on Bell despite his impressive resume.

``He's definitely a bright, dynamic, corporate climber,'' Adams said. ``There's a general sense that he'll go along with Cantalupo's agenda and plan, because he's one of the adopters of that plan.'' But his impact as CEO ``remains to be seen.''

Bell had been the heir apparent since the company promoted him from head of European operations to president and chief operating officer in December 2002 as part of the shake-up that saw CEO Jack Greenberg depart.

He began his McDonald's career at age 15 as a part-time crew worker in Sydney, with tasks that included cleaning toilets, and became Australia's youngest store manager at 19 and a vice president at 27. He headed the company's operations in his home country until 4 1/2 years ago when he was promoted to oversee its Asia Pacific, Middle East and Africa division, and then Europe in 2001.