September 5, 2007/The Atlanta Journal-Constitution-- Coca-Cola on Tuesday finished shuffling the management team of its struggling North American operation, realigning or creating more than 70 middle management positions.

But Coke officials would not answer the natural next question: Will layoffs follow, as they often do in such cases?

When asked point-blank, Coke spokeswoman Lori Billingsley said, "This is not an exercise in headcount reduction, but in transforming our business."

Still, Coca-Cola has a lot of work ahead to combat declining soft drink sales in its biggest market, which accounts for roughly 20% of its global profits.

Coke has struggled with lagging sales, mostly in the United States, of some of its core carbonated soft drinks. Volume sales of Coca-Cola Classic in the U.S. have declined since 2000, according to industry newsletter Beverage Digest. Volume sales of Diet Coke, which had grown steadily in recent years, fell for the first time in 2006.

In an interview with The Atlanta Journal-Constitution earlier this year, Coke president and chief operating officer Muhtar Kent said he had been "unpleasantly surprised by how deep some of the problems were" in the company's North American operations when he took over as the company's No. 2 executive late last year.

The filling out of the executive flow chart, announced to employees late Tuesday, comes six months after Coke North America reset the top executives reporting to president Sandy Douglas.

In March, Douglas and Kent tapped two company executives from overseas to help run new business units created within Coca-Cola North America, signaling a new era for the division by which all others had been measured for decades.

Deryck van Rensburg was pulled from Coke's German division to run a new "emerging brands" unit, which focuses in part on developing new lines of drinks at a time when consumers' tastes are changing rapidly.

Hendrik Steckhan was brought over from Brazil to run a new "sparkling beverages" unit that focuses on regular carbonated soft drinks and energy drinks. At the time, Douglas said the unit would be the "heart and soul of our business in the United States."

"Sparkling beverages" is Coke's new term for carbonated soft drinks, which company executives believe have been stigmatized in recent years during the debate over the role of sugary soft drinks in childhood obesity.

A third new unit, "still beverages," headed by new hire Brian Kelley, was created to concentrate on noncarbonated drinks ranging from water to tea. Pepsi has innovated and acquired new companies in this realm more quickly than has Coke during the past decade.

That may be changing, however. Coke recently agreed to purchase Vitaminwater maker Glaceau for $4.1 billion. Coke said it would operate the upstart company as a stand-alone unit run by Glaceau founder Darius Bikoff. The Coke organizational chart sent to employees Tuesday shows Bikoff will indeed report directly to Douglas.

The chart also showed the teams that will help Van Rensburg and Steckhan carry out their mission.

From the September 10, 2007, Prepared Foods e-Flash