Altria Group, Inc. (MO-NYSE) has announced a streamlining of operations to cut costs in a move that will result in a North Carolina manufacturing plant being closed by 2010. The Cabarrus, North Carolina plant that employs 2,500 workers will be closed and manufacturing will be consolidated at its Richmond, Virginia plant. Much of the production for Philip Morris International will further be moved to Europe, eliminating much of the shipping/freight costs.
The company expects savings to start in 2008, and total cost savings by 2011 are expected to be in the $335 million per year. Of the savings, $179 million will go to Philip Morris International and $156 million will go to Philip Morris USA. It sees charges of $325 million, or $0.10 off of EPS. The charges will be mostly taken in Q2 and about $50 million will come later in 2007.
It sounds like if you are a real estate agent around Cabarrus, North Carolina that you will probably have a lot more housing supply to sell.
Jon C. Ogg
June 26, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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