This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Altria Shakes Up Production

Altria Group (MO - Get Report) disclosed plans to shutter its Cabarrus, N.C., cigarette plant and transfer production for Philip Morris International to facilities in Europe.

The cost savings will be felt starting next year. By 2011, estimated annual savings should be around $335 million. Cumulative expenses are expected to be about $670 million, with roughly $353 million going toward employee separation.

Philip Morris USA will take a pretax charge of $325 million, or 10 cents a share, in the second quarter.

The Cabarrus plant has about 2,500 employees, and as many as possible will be moved to another Philip Morris location in Richmond, Va. Workers who don't transfer will be offered severance packages. The Cabarrus plant is expected to be closed by the end of 2010.

Currently, Cabarrus produces about 57 billion cigarettes for Philip Morris International, and that output will shift to Europe by the third quarter of 2008. Richmond will be responsible for making cigarettes sold in the U.S.

" We have a number of facilities in Europe and haven't determined where yet the production will go," said Tim Kellogg of Altria's investor relations. "Once the transfer is completed, all of PMI's production will come from Europe."

While the regulatory environment for tobacco companies seems to have stabilized, U.S. cigarette sales have been declining. Altria cited the drop-off as a factor in its decision to consolidate its facilities.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
MO $52.07 -0.53%
AAPL $130.28 0.47%
FB $81.53 -1.07%
GOOG $565.06 3.30%
TSLA $218.42 -0.08%


DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs