Reynolds American to take $47 million charge in 4th quarter for manufacturing buyouts
By APWednesday, December 16, 2009
Reynolds American to take $47M charge for buyouts
WINSTON-SALEM, N.C. — Cigarette maker Reynolds American Inc. said Wednesday it plans to take a fourth-quarter charge of about $47 million for costs related to buyouts at two R.J. Reynolds Tobacco Co. factories.
Earlier this month, the Winston-Salem, N.C.-based maker of Camel cigarettes said it offered buyouts, which includes severance pay, to about 1,800 workers at the North Carolina manufacturing plants to cut costs. About 400 workers opted to take the offer, the nation’s second-largest tobacco company said.
Most of the reductions will take place in 2010 and begin as early as January, and others will have release dates in early 2011. As a result of the reductions, the company said it expects to achieve cost savings of about $17 million in 2010 and about $30 million in 2011.
The move comes as tax increases, health concerns, smoking bans and social stigma continue cutting into demand for cigarettes.
