November 18, 2008 - Mayodan, NC - A need to cut costs has led General Tobacco Co. to reverse its growth strategy, at least temporarily, and lay off nearly 25 percent of its work force in Mayodan, the company said today, 11/17/2008. The discount cigarette manufacturer moved to Mayodan from Miami earlier this year to be closer to the U.S. tobacco industry. It began production in March with a work force compromised of many former employees from manufacturers such as R.J. Reynolds Tobacco Co. and Lorillard Tobacco Co.
The company laid off 31 employees — 28 in its production and warehouse units and three in its administrative offices, said Ronald Denman, an executive vice president and general counsel. Melisa Chantres, a spokeswoman for General Tobacco, said that the company had 126 full-time employees before the layoff. "Our shipments have slowed down, so we don't need to make as much product right now," Denman said. He said that the job cuts have affected its second and third shifts.
"As is the case with most U.S. industries, General Tobacco has been affected by the sweeping downturn in consumer spending," Denman said.
"It is our sincerest hope that this economic hardship, being felt by all, will pass quickly so that we may bring these employees back, who we consider family."
The company has pledged to create at least 200 jobs by 2010 as part of becoming eligible for up to $3 million in performance-based local incentives.
The layoff is not a good sign for the tobacco industry given that many smokers tend to switch to discount brands during rough economic times, said Stephen Pope, the chief global-market strategist with Cantor Fitzgerald Europe.
Reference: Discount cigarette manufacturer cuts jobs by
Richard Craver, Winston-Salem Journal, 11/17/2008.
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