Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, November 27, 1993 TAG: 9311270062
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
SOURCE: Associated Press
DATELINE: RICHMOND LENGTH: Medium
The company's restructuring will cut 10 percent from the work force over the next year at its cigarette factory and other units in Richmond.
Philip Morris U.S.A, the New York-based conglomerate's domestic tobacco unit, will cut about 800 hourly and 100 salaried employees, said Stephen Darrah, vice president for manufacturing. In the Richmond area, the company employs about 9,000 workers at its cigarette factory and other manufacturing operations.
"Many successful and competitive corporations have been faced with work-force issues in these difficult economic times, and Philip Morris is no exception," Darrah said at a news conference.
He declined to say how much money Philip Morris hopes to save with the employee reductions, which are to begin in June. He said most of the hourly workers affected earn between $18 and $20 an hour. He did not say what types of salaried workers would be cut.
The company does not plan to close any Richmond facilities or transfer the eliminated jobs elsewhere, Darrah said. It plans to offer severance allowances based on time served plus a variety of outplacement, counseling and support services.
The president of the largest union at the plant said he had been warned of the cutbacks and was working with management to ease the blow.
"We're going to do everything in our power to try to convince the company to look at alternative ways of downsizing other than just laying people off," said Jerry Sprouse, president of Local 203-T of the Bakery Confectionery and Tobacco Workers Union, which represents more than half of the factory's 9,000 employees.
"I'm very much in hopes that we can work out an acceptable solution" such as an early-retirement plan, he said.
Sprouse said he was encouraged by the way the company had handled the announcement. Management met with labor leaders Monday and mailed letters to all workers Wednesday, he said, to save them from learning of the announcement from the news media.
This is the largest layoff in the 22 years Sprouse has worked for Philip Morris. In 1983, the company let 591 workers go. This time, Sprouse said, the workers will be better prepared, because Philip Morris has agreed to pay for college or job training for up to three years after the layoff.
Even so, the news has a sting.
"Being around the holidays, no, this is not a good time; but unfortunately, I can't control the board of directors and when they decide to meet," Sprouse said.
Philip Morris said it would take after-tax charges of $952 million in the fourth quarter to cover plant closings, severance payments and other costs. The restructuring will cut the company's 168,000 work force 8 percent.
The $52 billion conglomerate said it expects $600 million in after-tax savings by 1997 as a result of the restructuring.
Staff writer Greg Schneider contributed to this story.
by CNB