Production ends at Philip Morris USA’s N.C. plant

As of this morning, Philip Morris USA’s Richmond manufacturing plant is the only site where the company makes cigarettes.

The Henrico County-based tobacco company said yesterday that the last cigarettes — specifically, Marlboros — would come off the production line at its Cabarrus County, N.C., manufacturing plant at about 9 last night.

About 1,000 employees were working their last shifts at the plant near Charlotte yesterday. An additional 100 employees will continue to work there as the plant is decommissioned, which could take until late this year or early next year.

In June 2007, Philip Morris USA said it would close the North Carolina plant and move its production to Richmond in 2010. The decision came as its parent company, Altria Group Inc., made plans to spin off its international cigarette subsidiary as a separate company.

The spinoff, completed last year, eliminated the export market for the company’s U.S. cigarette factories, which now supply only the slowly declining domestic market.

The company said 565 employees at the North Carolina plant accepted transfers to Richmond, and nearly all of them already have moved.

Altria said it had about 2,300 employees at its Richmond cigarette plant at the start of this year and about 5,400 overall in the Richmond area, but the company also acknowledged making significant job cuts from its local operations this year as it adjusts to a smaller cigarette market. The company has not confirmed a specific number of job cuts.

In May, the company said it would close the North Carolina plant by the end of July, months earlier than it had first announced, in part because of the ongoing erosion in cigarette shipments.

As some employees drove from the plant for the last time yesterday, they honked repeatedly and waved at each other.

Ramona Caudill, 55, of Concord, N.C., who worked at the plant as a packer for 27 years, said her shift was bittersweet. “There’s been a lot of hugging today,” Caudill said. Her last shift ended at 3 p.m.

“But we’ve had two years to get used to the idea so everyone has gotten their ducks in a row,” said Caudill, who received $91,000 in severance and plans to retire.

A majority of the workers will receive severance packages, ranging from six to 20 months of pay. Caudill said the packages were generous. Her niece has worked for Philip Morris for four years but received a 41-week severance package, she said.

The North Carolina plant, on U.S. 29 in Concord, about 20 miles northeast of Charlotte, opened in 1982. At its peak production, it manufactured 155 billion cigarettes a year and employed 2,500 people. Its production volume was typically higher than the Richmond plant’s, in part because the Cabarrus site had “super high speed” machinery that could produce 1,000 packs per minute, compared with 700 packs by machines used in Richmond, said Paige Magness, a company spokeswoman.

The faster machines are being moved to the Richmond plant, which is undergoing renovations. New tobacco-processing equipment is being installed; the basic infrastructure is being upgraded; and office areas, the fitness center and the cafeteria are being remodeled, Magness said.

The 2.5 million-square-foot North Carolina plant has been put up for sale, along with about 1 million square feet of distribution space and 1,500 acres of developable land around the plant. Magness said she could not comment on prospective buyers.

“The site is actively being marketed,” she said. “We have certainly had a number of interested parties along the way.”

© Copyright: 2.timesdispatch

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