Tobacco Companies Reduced The Employers

The sun appears to be setting on the era of high-dollar tobacco manufacturing jobs in Winston-Salem. It shouldn't be shocking news to the community that R.J. Reynolds Tobacco Co.'s local workforce is shrinking yet again. The company has announced 19 job cuts since 1983 that have reduced the number of employees from 15,500 to 2,500. However, last week's start to the next round of workforce reductions appears to have struck more of a nerve than did major job cuts in 2003, 2008 and 2009. That's because, unlike previous job-cut announcements, Reynolds American Inc. specifically said pay rates are being evaluated. And they're more likely to fall rather than rise. The increasing presence of contract workers, which Reynolds has used for more than a decade, also has proved unnerving to employees who have contacted the Winston-Salem Journal. They declined to be identified out of fear of losing their jobs and/or severance package. There had been a sense — whether warranted or not by economic reality — that the high salaries for production jobs were untouchable despite the multiple job cuts. Driving that reasoning: Reynolds needed to keep production salaries at or near the rate paid to union workers at Lorillard Inc. and Philip Morris USA to make unions less enticing to its employees. Spokeswoman Maura Payne said that if the company does decide to change the rates it pays manufacturing employees, "it is likely the revised target rates would be more in line with average manufacturing salaries in the Southeast." "If the company sets new target pay rates for future hires, it will not reduce the salaries of the current employees," Payne said. According to Payne, the average compensation was $70,195 for the 1,320 Reynolds Tobacco production and maintenance employees who were eligible to vote on union representation in October. That number includes benefits and bonuses. Salaries on their own tend to be in the range of $55,000 to $65,000 for experienced workers. By comparison, the average annual salary for North Carolina manufacturing employees was $35,607 in December, according to the N.C. Commerce Department. If Reynolds targets that rate, new hires could be paid a salary that's 35 percent to 45 percent less than what veteran employees are making. The number of new hires also could be limited considering the company is expanding its outsourcing of production jobs to temporary agencies.