ITG Brands LLC has made official plans to end production at its Reidsville cigarette manufacturing plant by Dec. 31, effectively eliminating 110 jobs.
The Greensboro tobacco manufacturer announced Nov. 1, 2018, it would close the plant at 301 N. Scales St. by April 2020.
ITG said at the time the 127-year-old plant would maintain production of former Commonwealth Brands cigarette products until the shift is completed to the former Lorillard Inc. plant in Greensboro.
The manufacturer said in Thursday’s WARN notice to the N.C. Commerce Department that it would begin shutting down operations on Dec. 19 and that 102 jobs would be eliminated Dec. 31, and the rest by Feb. 27.
Employees were told Thursday of the final plant-closing decision.
By moving operations to Greensboro, ITG Brands will lower manufacturing and regulatory costs, “allowing the company to continue to reinvest in its business and continue growing its brands,” said Dan Carr, who was ITG’s chief executive and president in 2018.
“Reidsville has experienced and dedicated employees, a great business climate and cooperative public officials,” Carr said.
“However, it is a business decision we had to make.”
ITG said displaced hourly employees will receive a severance package. It has established a benefits plan for salaried employees affected by the closing.
The hourly workers are represented by Local 192T of the Bakery, Confectionary, Tobacco Workers’ & Grain Millers International Union.
ITG spokesman Mark Smith said in November “it is to be determined whether Reidsville production employees will be offered jobs in Greensboro.
“But at this point, we don’t expect there will be new jobs added to Greensboro,” Smith said. “Additional volume is expected to be handled by existing workers at the Greensboro facility.”
Smith could not be immediately reached for comment Monday as to whether those plans for the Reidsville workforce have changed.
Reidsville and Rockingham County released a joint statement in November about the closing, saying it “is extremely upsetting news to all of us in Rockingham County.”
The officials said they worked for several years with ITG to keep the plant open.
“We understand that sometimes a company must make a bottom-line business decision,” according to the statement. “Unfortunately, we are on the wrong side of that decision this time.”
On Monday, Leigh Cockram, director of the county’s Center for Economic Development, Small Business & Tourism, pointed to manufacturers, such as Pella adding 125 jobs in Reidsville and Gildan Yarns adding 85 in Eden, that could hire some of the ITG workers.
“We are working with ITG Brands on redevelopment of the Reidsville plant, which has been an iconic fixture in the city since the late 1800s. We will assist them with marketing the property and any machinery and equipment as needed.”
The production shift seemed to be inevitable after Reynolds American Inc.’s plans to buy Lorillard surfaced in July 2014. Reynolds completed the $29.25 billion deal in June 2015.
The companies sold Reynolds’ cigarette brands Kool, Salem and Winston, and the Lorillard cigarette brand of Maverick and its blu eCig brand to then-Imperial Tobacco Group Ltd. for $7.1 billion to ease regulatory concerns about competition and help Reynolds pay for the overall deal.
Since the sale, at least 375 ITG production jobs have been eliminated. Smith said its Greensboro workforce has shrunk from 1,700 to 925. Production workers, which numbered 1,100 before the sale and 675 afterward, were hit hardest.
ITG also has 859 sales and marketing employees across the country and 22 at its leaf-processing plant in Danville, Va.
Reynolds and Lorillard had a reciprocal manufacturing relationship for most of the first year after the completion of the sale in which they continued to make their former brands at their respective Tobaccoville and Greensboro plants.
Meanwhile, ITG made USA Gold, Sonoma, Montclair and Rave cigarette brands in Reidsville. The two ITG plants are within 25 miles of each other.
ITG held a 6.9% U.S. market share, third overall, but well behind Philip Morris USA (53.9%) and R.J. Reynolds Tobacco Co. (33.8%), according to the latest Nielsen data on convenience store sales.
ITG’s top-selling brand is Winston with 2% market share, along with 1.5% each from Kool and Maverick. ITG has said its market share is at 10%.
Imperial made Winston a growth brand — one of 10 globally. Those 10 brands receive the bulk of Imperial’s marketing and innovation spending. Winston’s market share is among the Top 10 U.S. brands.
Smith said ITG is investing $70 million in new high-tech, high-speed equipment at the Greensboro facility, “which indicates how we feel about the future.”