If history is any guide, the buyouts being offered by the R.J. Reynolds Tobacco Co. may well be a harbinger of more job cuts to come at the company that put Winston-Salem on the map. It's another reason community leaders should redouble their efforts to create a highly-qualified work force that will attract more high-tech companies.
Reynolds is asking for volunteers from among its 1,800 manufacturing employees to take severance packages, the Journal's Richard Craver reported last week. We doubt many employees will line up to take the offer. Jobs are scarce, especially manufacturing jobs that pay from $50,000 to $62,400 annually. Generations of workers have comfortably supported their families with Reynolds' generous pay and benefits.
But it's a way of life that won't last forever. There's a lower demand for cigarettes nationwide. High taxes, smoking bans and the health risks of smoking are taking their toll. This year both North Carolina and Virginia banned smoking in restaurants and bars.
Since 1983, Reynolds has cut 80 percent of its local work force. By the time a 2008 layoff is complete in early 2010, the company will have gone from a work force of 15,500 to just over 3,030. There has been one upswing: Reynolds added between 800 and 1,200 jobs as part of buying Brown & Williamson in 2004.
But even if a significant number of employees take the buyout, more manufacturing cuts may be coming. The company emphasizes that it has not set a job-cut goal and the buyout offer is part of a business analysis. However, the last two times the company conducted business analyses, major job cuts followed.
Reynolds' Tobaccoville plant, a sprawling complex with 1,200 workers that opened in 1986 and is almost a city unto itself, is not in danger of closing. But its Whitaker Park plant, which employs 600 workers, could shut its doors within the next few years. When it opened in northern Winston-Salem in 1961, it was touted as "the world's largest and most modern cigarette manufacturing plant," a strong symbol of the company's success and promise.That picture is rapidly changing.
It would be difficult to overstate the beneficial impact that the R.J. Reynolds Tobacco Co. has had on the local economy. We hope it provides jobs for years to come. But it's no longer the driver of the economy. Our new economy, blossoming in the Piedmont Triad Research Park, around our hospitals and the new FedEx hub, will be based on many businesses instead of just a few. But it's imperative our leaders in government, business and education band together to recruit new companies, produce graduates ready for the work force and retrain laid-off manufacturing workers.
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