Day 009 - 08 Jul 94 - Page 06
1 with McDonald's?
A. Yes.
2
Q. Is there any financial contribution at all that McDonald's
3 ever makes to Perseco?
A. No.
4
Q. No loans?
5 A. None.
6 MR. JUSTICE BELL: It is, however, the entire basis of
Perseco's business?
7 A. That is correct. The only customer of Perseco is
McDonald's and they do get money from -- they purchase
8 packaging and they sell it to, not McDonald's directly,
but they sell the packaging to the distribution centres
9 which is another -- McDonald's does not own the
distribution centres either. So they receive their money,
10 Perseco does, for their services from the distributors who
buy it from Perseco.
11
MR. MORRIS: Is there a reason for this legal separation? Is
12 there some important thing in America to do with this
legal separation?
13 A. No, the McDonald's philosophy goes back to Ray Kroc.
His philosophy, from the very beginning of the company,
14 his vision for McDonald's -- it is the same vision today
-- is that we are a restaurant company. Our success is
15 going to be based on us running the very best restaurant
company possible; other franchise companies have done
16 different things related to their supply network; other
franchises have decided to own other parts of the
17 business, they have decided to vertically integrate.
McDonald's said: "No, we are not going to do that; we are
18 going to be solely a restaurant company; if we are going
to be successful and make a profit it is for that
19 reason". So Ray Kroc's philosophy from the very beginning
was they have a clear separation between the McDonald's
20 restaurant company and any suppliers.
21 That is why we, at McDonald's, do not have any ownership
interests in packaging companies, meat companies, french
22 fry companies etc..
23 Q. Was it always that way with McDonald's, in your knowledge?
A. Yes, from my knowledge, yes.
24
Q. It never owned or had subsidiaries, for example, meat
25 suppliers?
A. Not to my knowledge. My area of expertise is
26 packaging. I can say for certain that that is the case in
packaging.
27
Q. These four criteria that you balance, you said the four
28 were environmental concerns, customer impact, operational
efficiency and costs; is that correct?
29 A. Cost and availability, we put those two together.
30 Q. All these criteria are equal?
A. In a philosophical sense, yes. Let me explain that,
