The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Sunday, August 27, 1995                TAG: 9508270054
SECTION: FRONT                    PAGE: A1   EDITION: FINAL 
SOURCE: BY MARGARET EDDS, STAFF WRITER 
DATELINE: RICHMOND                           LENGTH: Long  :  153 lines

PHILIP MORRIS SPELLS PROSPERITY FOR MANY THE RICHMOND TOBACCO GIANT IS UNDER FIRE, BUT HAS ITS DEFENDERS.

The sweet, acrid smell of tobacco hung in the air as Paula Cousins bounded out of the Philip Morris plant, carton of Marlboro cigarettes in hand, and headed for her car.

Lighting up, the 34-year-old cafeteria worker - who has spent half her life working at facilities owned by the tobacco giant - inhaled and flashed a triumphant grin.

``I think it was great,'' she said, referring to ABC News' chagrined admission last week that reporters erred in accusing Philip Morris of ``spiking'' cigarettes with extra nicotine.

But Cousins' smile evaporated as she discussed another industry reality: high-fives over the ABC victory aside, these are perilous times for a product and a company long central to the lifeblood of Virginia's capital.

For 8,000 Philip Morris employees and hundreds of others - like Cousins - working in jobs that support Richmond's largest private employer, life is a roller-coaster of highs and lows often turning on the daily newscast. The result for many is a tight-knit camaraderie and an almost militant defense of the products they create.

Some recent news pleases Philip Morris workers. Cigarettes, many of them bound for rapidly expanding foreign markets, are spilling out of state-of-the-art machines at the company's massive south Richmond plant at a rate of 14,000 a minute most days.

The industry's prickliest critic, Rep. Henry A. Waxman, D-California, has been replaced by one of its coziest allies, hometown congressman Thomas J. Bliley Jr., R-Richmond, as chairman of the House Commerce Committee.

But a relentless assault continues from tobacco critics, who attribute 450,000 American deaths annually to the product, and the specter of increased federal regulation of the industry never has loomed larger. This month, President Clinton declared nicotine an addictive drug whose sale to minors should be regulated by the Food and Drug Administration.

While analysts say it could be years before the FDA's role is resolved in Congress or the courts, the announcement sent shudders through industry workers such as Cousins.

``Cancer can be caused by a lot of things, not only smoking,'' she said, arguing that her own introduction to cigarettes at 14 could not have been stopped by government authorities.

Asked how a severe drop in cigarette sales would affect her life and her community, Cousins found her answer cut short by the arrival of three security guards who escorted a reporter out of the company parking lot.

``Starvation and devastation,'' one of them answered for her.

For all its clout, King Tobacco's reign in the capital is less absolute than a few decades ago. Philip Morris employment is down from a high of 15,000 in the late 1970s. Young women no longer distribute free cigarette samples along Main Street at lunchtime. One area legislator, Del. William K. Barlow, a Democrat representing a corner of eastern Henrico County, has refused tobacco campaign contributions. And the ``Enjoy Smoking'' sign in the lobby at Philip Morris headquarters would be out of place in local government offices and dozens of businesses where smoking is restricted.

But tobacco still has a historical and economic hold on the community's psyche, symbolized by the towering Marlboro totem that introduces visitors to Richmond as they travel from the south along Interstate 95.

``From the aspirations of the Jamestown expedition through the ventures of William Byrd I to the international banking and finance functions of the present-day downtown, Richmond has been part of an evolving . . . commercial system long based on tobacco,'' wrote Marie Tyler-McGraw in her recently published book, ``At the Falls: Richmond, Virginia, and Its People.''

Some critics claimed they saw tobacco's influence at work last week in Chesterfield County. The Board of Supervisors, responding to charges that the school board collaborated with Philip Morris in testing hyperkinetic children in the 1970s, aimed a resolution at the congressman who raised the issue, not the tobacco company.

``I'm just bewildered'' by the supervisors' failure to also request information from Philip Morris, said Philip Schiliro, a spokesman for Waxman.

``Since Congressman Waxman made the allegations, he's the one responsible for answering,'' responded Supervisor Arthur S. Warren, explaining why the focus was on Waxman to provide evidence or withdraw his allegation. Chesterfield officials have said they can find no record that such activity occurred, although several Philip Morris reports hint at a relationship. The company says the idea was suggested, but never undertaken.

Philip Morris has a monthly payroll in the Richmond area of about $37 million, and estimates its annual contributions to the state economy at more than $1.3 billion. Statewide, the tobacco industry is Virginia's leading exporter, with Philip Morris leading the way. Tobacco exports surpass the combined export sales of the companies in second, third, fourth and fifth places.

Oscar Giles understands the personal dimensions of that success.

Giles has spent 20 of his 40 years working at Philip Morris, and the plant has afforded him a lifestyle that might otherwise have been unattainable, he said. Giles never finished college, but in a plant where the average hourly wage is $22, he believes he has fared better as an equipment operator than some former classmates with degrees.

But Giles is also worried about the future. With three children to educate, ``I'm sort of concerned,'' he said as he gathered last week with several others at the local headquarters of the Bakery, Confectionery, and Tobacco Workers Union, Local 203T.

Despite - or, some Richmonders say, because of - the villainy attached to the tobacco industry by critics, Philip Morris appears to savor its reputation for generous community philanthropy and enlightened employee relations. The company contributes about $1.8 million a year to local charities, according to a spokesman, and its employees regularly lead the way in United Way contributions.

``They have bought a lot of loyalty in this community,'' said Anne Morrow Donley, a Richmonder who is national issues coordinator and co-founder of the Virginia chapter of the Group to Alleviate Smoking in Public, GASP. Donley, who calls tobacco industry executives ``greedy drug pushers'' owns one share of company stock and regularly shows up at stockholder meetings to berate them over health issues.

Philip Morris insiders say the company shores up morale in troubled times with a steady diet of information about its responses to such charges. Employee publications and a display outside the lunchroom invite workers to compare what they may have heard in the news with the facts, as Philip Morris sees them.

Devices such as the full-page ad that appeared last week in the hometown newspapers of cities where Philip Morris plants are located, including Richmond, are also intended to boost confidence. Under the bold headline, ``Apology Accepted,'' the company reprinted a six-paragraph statement in which ABC in part backed away from a story that aired on the DayOne program in early 1994.

The story charged that Philip Morris ``artificially spikes'' and ``fortifies'' tobacco products to keep users hooked. Philip Morris responded with a $10 billion libel suit, the largest in legal history.

The company withdrew the lawsuit last week in response to the settlement agreement. Even though the statement - read three times on the air - leaves open the prospect that Philip Morris controls nicotine levels to keep people smoking, ABC called the spiking charge ``a mistake.''

``We're fighting back, and that's the thing our employees feel good about,'' said Jay S. Poole, Philip Morris director of community relations, explaining why he believes morale among company employees is higher than a year ago.

That fighting spirit stands out in Gerry Hicks, who came to Philip Morris as a 19-year-old, 24 years ago, and is now a member of the union negotiating team.

With Clinton using teenagers as an entree to tobacco regulation, ``he's making us out to be some kind of weirdos, like we hang around playgrounds in long trench coats,'' said Hicks, adding that he feels betrayed by the president he once supported.

Hicks stopped smoking six months ago after open heart surgery, but he attributes his illness to heredity, not habit. Was it hard to stop? ``Sure,'' but no more so than it would be to give up chocolate and the X-Files on Saturday night television, he replied.

Warren Farrar, a 17-year-old high school student working in an internship program at Philip Morris, was more skeptical. Standing outside the plant last week, he explained his decision not to smoke. ``It's bad for your health,'' he said.

But would that deter him from seeking a job with the company?

Absolutely not, he responded.

And why not?

Farrar smiled and shrugged, as if the answer was obvious. ``It's Philip Morris,'' he said. by CNB