July 27, 2017

Reynolds Loses Independence, Winston Loses Its Historic Incubator

Yesterday the Winston-Salem Journal’s Richard Craver wrote a nice article on BAT’s purchase of Reynolds’ Tobacco. The corporation that was synonymous with Winston-Salem for so many decades is no longer an independent entity.

Today, thanks largely to the globalization and financialization of the Tobacco industry Winston and Salem cigarettes are made in Greensboro by ITG Brands). Camel and Newport cigarettes are made in Tobaccoville by R.J. Reynolds, now a subsidiary of BAT.

There haven’t been any cigarettes made in Winston-Salem since Reynolds’ Whitaker Park facility closed in 2012. Roughly 15 percent of Americans are still addicted to cigarettes, a defective product that is as profitable as it is deadly. But that no longer translates to the number of jobs that it once did.

The Journal estimates that Reynolds has between 2,000 and 2,200 local employees. That’s just a small percentage of the jobs that Reynolds’ provided thirty years ago. Gone are the days when everyone in Winston knew someone who worked at Reynolds. Now, it’s more common for people to know someone who used to work at Reynolds.

BAT’s acquisition of Reynolds is in many ways “business as usual,” as Gayle Anderson, president and chief executive of the Winston-Salem Chamber of Commerce, was quoted saying in Tuesday’s Journal. Anderson is right. But there is more to say on the topic.

But losing Reynolds as an independent company is something to mourn even if it was long-predicted. BAT has had a grip on Reynolds since 2004 when Reynolds purchased Brown and Williamson from BAT, but BAT retained a 42 percent interest in the new company. When a 10-year moratorium on BAT increasing its share in Reynolds expired in 2014, it was widely expected that BAT would take full ownership of Reynolds at that time. But instead, BAT the master dealmaker encouraged Reynolds to acquire Lorillard’s crown jewel Newport brand, while offloading unpopular Reynolds brands, such as Winston’s and Salem’s to ITG Brands.

Reynolds has been on the decline for decades. But that doesn’t mean we shouldn’t mourn the loss of Reynolds’ independence. Reynolds has been an unparalleled source of wealth creation in Winston-Salem, since 1913, the year Winston and Salem became one city and Reynolds’ introduced Camel cigarettes.

High-tech jobs in the Innovation Quarter have replaced some of the thousands of manufacturing jobs lost in recent decades. But Winston has yet to find a real substitute for tobacco. Herbalife and Caterpillar pale in comparison to Reynolds.

Signs of Reynolds’ largess are everywhere in Winston, from the R.J. Reynolds Building to Wake Forest University and so many places in between. There is still a lot of wealth in our segregated and unequal city that can be traced back to Reynolds.

Look at a business as seemingly insignificant as L.A. Reynolds. L.A. Reynolds, the mega-nursery on Styers Ferry Road recently closed after nearly 40 years in business. Open since 1979, Jerry Long, former president of Reynolds Tobacco, acquired a 90 percent stake in the company in 1991 according to the Journal. Long’s children are most likely going to sell the property to developers.

L.A. Reynolds might seem like a trivial business. But it’s just one example of the countless direct and indirect contributions Reynolds has made in Winston. L.A. Reynolds’ recent closure, which coincided with Reynolds’ takeover by BAT is another example of how things are changing in Winston and not necessarily for the better.

 

 

 

 

 

 

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