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Philip Morris will shut down Concord plant by the end of July

Philip Morris will stop production at its Concord plant by the end of July, a year sooner than originally scheduled, the company announced today.

The Cabarrus County plant, located on a sprawling campus off U.S. 29, has about 1,100 remaining employees who will be laid off at that time.

The workers were told of the decision this morning.

In June 2007, Altria, Philip Morris’ parent company, said it would consolidate operations of its Concord and Richmond, Va., facilities by the end of 2010.

Company officials cited a faster decline in cigarette sales as the reason for accelerating the closing. David Sylvia, company spokesman, said the economy and a new federal excise tax increase were to blame for the decline.

In 2007, about 2,500 people worked at the plant. Since then 530 workers transferred to Richmond, while hundreds more left for other jobs.

An additional 140 employees were laid off this February, pushing Cabarrus County’s unemployment rate for the month to 11.2 percent.

Carolyn Mays, director of the Cabarrus County JobLink Center, said she didn’t have the breakdown yet of where all the employees lived, though many could be from Rowan County.

Mays has been visiting the plant regularly since last November, trying to prepare employees for a shutdown to come in 2010, not this year.

“When I have been out there talking to folks, they have been from all over,” Mays said.
She has spoken with employees who commuted from places as far away as Surry and Forsyth counties and Lancaster County in South Carolina.

Four workers from Louisville, Ky., rented a place here during the week and returned home on the weekends, she said.

“It’s just amazing to me how far they have traveled,” Mays said of some of the workers.
Mays plans to spend all day Monday at the plant.

Philip Morris has been Cabarrus County’s biggest taxpayer.

The site covers 2,100 acres. The plant itself will be decommissioned in 2010, but its completion depends on the needs of potential buyers. The closing will leave the Richmond plant as Philip Morris’ only U.S. cigarette factory.

The Philip Morris property includes almost 1 million square feet of warehouse space and 2.4 million square feet of manufacturing space.

In its announcement, Philip Morris USA said the early closing decision was made “to address manufacturing overcapacity resulting from ongoing declines in U.S. cigarette volume and reduced contract manufacturing.” “PM USA is taking this action to address ongoing cigarette volume declines, including the projected impact of the recently enacted federal excise tax increase,” the statement said.

On April 1, the federal excise tax on cigarettes increased by 158 percent, or about 62 cents per pack.

Since the announcement in 2007 that the Concord plant was destined to close, the company extended the opportunity to transfer to Richmond to more than 1,000 employees.

Per union agreements, remaining hourly employees will be eligible to be recalled to fill cigarette manufacturing job openings with PM USA for up to three years from the date of layoff.

Hourly and salaried employees also will be eligible for between six and 20 months of severance pay and benefits, depending upon length of service.

PM USA said it is working with state and private outplacement agencies to provide extensive outplacement services, including individualized career counseling, career information and guidance workshops, skills assessments and job search resources to assist employees.

These additional outplacement services complement PM USA’s ongoing educational benefits and educational reimbursement program, the company said.

“I regret the impact of this closure to our employees and their families,” Craig Johnson, president of Philip Morris USA, said in a press release.

“Since we announced in June of 2007 the difficult decision to close this facility, our employees have performed extraordinarily well under very difficult circumstances. We are very proud of their contributions to our company and the Cabarrus community over the past 25 years.”

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