McDonald, New P&G CEO, Has Work to Do (Updated)

After days of speculation, Procter & Gamble(PG Quote) announced this morning that Bob McDonald will head up the company.

McDonald, a 29-year-veteran of Procter & Gamble, will take over starting July 1 as CEO, and he is in for a real treat.

His first order of business will be to pick Procter & Gamble up from the shambles of the recession. Shoppers have become thrifty, opting for no-name household items instead of P&G's better known names like Tide and Gillette.

Last month the company issued expectations smaller than Wall Street's, and posted a 44% plunge in third-quarter profit.

Procter & Gamble has been working on developing international markets and restructuring company operations, namely expense control.

McDonald's army background (he graduated from West Point) should come in handy as he faces some hard decisions, such as deciding how much the company should promote its lower-priced products.

During his tenure at the company, McDonald has served as chief operating officer and president, and has extensive background in the Asian region, where he sees growth opportunity for P&G. He thinks P&G can more than double its annual sales, to $175 billion a year, over the next 15 years by increasing its reach into countries such as India, China and Brazil.

While investors shouldn't expect immediate changes come the summer, they can expect to see cost cuts early on.

McDonald will replace A.J. Lafley, who became chief executive in 2000. Lafley will remain chairman of the company.

Shares of the company closed down only slightly .6% to $52.08.