Former General Counsel Becomes CEO of Coca-Cola Enterprises.
Says Coke/CCE Need to Work 'More Closely.'

Coca-Cola Enterprises names Lowry Kline CEO.  New head of Coke bottler served as company's general counsel from 1991 to 1999 and vice chairman for last year; will remain  vice chairman.  As CEO, he succeeds Summerfield Johnston who retains chairman post.  John Alm continues as president/COO and joins board.

Kline. New CEO tells BD his main priority will be "making sure we have the right people in the right places to meet the challenges the industry is facing."  Lawyer?  Asked about lawyer running bottler, Kline says "lawyers, especially business lawyers ... (are often)  directly involved in a lot of the events, developments and trends in the businesses they represent.  That experience can be beneficial."  But adds, "lawyers have to give up some of the tendencies they've learned and be a little more free-thinking."  Relationship with Coke?  "We're working closely as partners.  If there's any weakness in the relationship, it's the result of external circumstances affecting the system.  We're going to have to work more closely going forward."

Perspective. CCE has reputation for good execution.  But it is grappling with complicated matrix of declining financial support from Coke, rising prices and soft volume.  Additionally, some strains have developed in CCE/Coke relationship, and CCE's main U.S. competitor -- Pepsi Bottling Group -- has become stronger.  CCE recently issued profit warning (BD 3/30/01), and its stock tumbled.

Management. Many expected Johnston, age 68, to step down and name successor this  spring.  In early 2000, Johnston -- then chairman -- took back CEO-ship when Henry Schimberg retired.  Alm named president. Choice of Kline surprises some, but others note his long, close relationship with Johnston/CCE and what Johnston calls his "strong intellect."  Morgan Stanley's Andrew Conway says Kline is "firm believer in the critical need for bottlers to improve returns ... He's an accomplished tactician." Sanford Bernstein's Bill Pecoriello says, "CCE faces a lot of challenges.  Alm will focus on operations, and that's critical.  Lowry can handle the corporate end of the business in Atlanta, including the relationship with Coke."  Kline.  Age 61. Was partner in Chattanooga, Tennessee law firm 1970 to 1996.  Has long relationship with Johnston.  Became senior vp/general counsel of CCE in 1996.  Executive vp/general counsel 1997-1999.  Became chief administrative officer in 1999.  Named vice chairman in April 2000.