CANADA. Imperial Tobacco Canada, the giant of the country’s tobacco business, yesterday announced a major corporate restructuring, which will mean the loss of some 840 jobs.
The company said the restructuring will allow it “to maintain its leadership position in the tobacco industry despite the reduction in sales, the steady declines in total industry volume, the resulting overall industry over-capacity, as well as significant price competition”.
The principal changes, which will occur largely by the end of 2003, are as follows:
• closure of its Montreal production plant and transfer of these operations to its Guelph and Aylmer Ontario facilities;
• closure of its threshing operations which are part of the Aylmer, Ontario plant;
• phase-out of its reconstituted tobacco facility at the Aylmer, Ontario plant;
• transfer of its leaf export business and domestic leaf purchasing at tobacco auctions to a third party; and
• restructuring of its Montreal head office, which will be completed by the end of 2004.
Unfortunately, as a result, almost 840 employees will be directly affected including some 430 unionized regular employees, 240 seasonal employees and 170 non-unionized employees. This will eliminate about 580 positions in the Montreal area, and approximately 260 positions at its Aylmer, Ontario facilities.
Imperial Tobacco Canada said it will continue to maintain a strong business presence in both Quebec and Ontario. Its manufacturing operations will be focused on its Guelph and Aylmer facilities. The head office and research and development functions will remain in Montreal. The restructuring does not impact regional sales offices or regional sales representatives.
In a statement the company said : “Imperial Tobacco Canada made these decisions after substantial analysis of its business processes and market realities. This corporate restructuring will result in special charges to second quarter earnings totaling approximately C$190 million after tax, including charges relating to non-cash write-offs of plant and equipment.
“The company believes that this corporate restructuring is essential to enhance its competitiveness and capabilities to maintain its leadership position in the industry, and to face the current reality and future challenges of the industry.
Note: Imperial Tobacco Canada, founded in 1912, has a 61.6% share of the domestic cigarette market, a dominance reflected in a strong position in Canadian duty free.
