After investing $100 million in upgrades and a major expansion, the parent company of U.S. Smokeless Tobacco is halting production at its plant on Merrimac Trail.
Altria developed Marlboro Snus to get into the smokeless game. It recently bought U.S. Tobacco, maker of Skoal. Ken Garcia, spokesman for Altria, said the idling was a move to “consolidate” smokeless tobacco production while Altria “evaluates its future needs.”
Garcia said the plant currently has 41 employees. When it closes at the end of October, he said Altria will work to place as many of them as possible at smokeless tobacco facilities in Illinois, Tennessee and Kentucky, as well as two Philip Morris plants in Richmond.
The decision comes just four years after the plant reopened after being closed for years. York County leveraged $350,000 with $320,000 from the state to upgrade the plant.
The building started in 1977 as an engineering facility that worked on high-speed equipment that made cigarettes.
In 1995 operations were moved to Newport News. A year later the York facility began making an Electrically Heated Smoking System, but that flopped and the plant closed in 2004.
County administrator James McReynolds couldn’t pinpoint the financial impact in terms of lost machine and tool tax revenue. In 2006, when plans to reopen the plant were announced, county officials estimated $800,000 in tax revenue.
Last year’s closure of the Yorktown refinery will ultimately cost the county $4 million annually.
Jim Noel, director of York’s Office of Economic Development, said he was unaware of Altria’s plans to close until the announcement was made Wednesday. In his talks with plant executives, they consistently said the plan was to continue to produce Marlboro Snus.
Noel said his goal is to meet with the plant’s personnel and real estate experts to try to find another use or user for the building.
“We’ve got a fantastic facility there,” he said. “It’s a state-of-the-art manufacturing facility.”
Noel conceded it could be tough in the sluggish economy to find another company to take over the building, but he remains optimistic.
“It’s been upgraded to modern standards,” he said. “York County is a wonderful community with a low tax rate with a skilled workforce. I think it would be a wonderful opportunity for another company.”
Garcia said there is no plan to sell the plant.