Global Communications Benchmarking

Global Communications Benchmarking

Oliver

MBA 500

University of Phoenix

September 26, 2007

Many companies throughout the world face opportunities like Global Communications daily. Just like Global Communications, their management decisions, both ethically and morally, can have a long bitter sweet taste on their employees and the communities for which they live. Pillowtex, Inc and Philip Morris, USA are two such company’s. One thought about restructuring with ethics and morals in mind. The other did not.

Conventional wisdom holds that cigarettes are relatively recession proof. However in today’s difficult economy, U.S. smokers are paying more per pack than ever before. Thanks to hefty tax hikes, more consumers are quitting smoking, than starting. The industry has also has increased competition from discount brands. The merger of tobacco giants, R.J. Reynolds Tobacco Corporation and rival Brown & Williamson and lastly, numerous lawsuits that prompting the Master Settlement Agreement reached with State Attorneys Generals, has eroded the once lucrative and profitable tobacco environment. As a Result, in June of 2007, The Altria Group, Inc., the parent company of Philip Morris, USA, announced to it would discontinue operations at its Cabarrus, NC manufacturing center. The move would also force employees at the facility to relocate and/or face termination.

The June decision was announced at a press conference at the Cabarrus County, NC location, given by Philip Morris, USA’s Chief Executive Officer, Michael Symansky. In his announcement, Mr. Symansky, acknowledged that “Philip Morris, would make every effort to do what is feasibly, morally, and ethically right, for the 2,500 Philip Morris employees and communities, during this transition period”.( Lawrence Cabbs, personnel communication, June 26, 2007)

So far Philip Morris has done just that. They have made some good ethical and moral decisions that have aided their employees. First, after a good negotiation with its partner, the BCT-GM (Bakery, Confectionary, Tobacco, and Grain Millers) Union, Philip Morris offered employees not wanting to relocate, a severance package. The package gives employees one year severance salary and health benefits (based on 10 years service calculation) and 2 years of free education and training tuition at accredited universities and colleges.

Second, Philip Morris, established a transition room, called the Richmond Room. The Richmond Room, helps employees and their families. , make a good sound decision as to relocate or not. Contracted Richmond Chamber of Commerce employees were temporarily relocated to assist employees with maps, schools, housing choices, and entertainment decisions. A virtual, “Welcome to Richmond” room.

Finally, those employees who decide to relocate to Richmond will be offered a $50,000 bonus, $20,000 to relocate and the rest contingent on employees staying employed, for a year.

The discontinuance of operations will also have a devastating effect on Cabarrus County. Philip Morris was also well aware of this. So it established the PMUCF. This charitable arm of the Philip Morris employees, allows them to donate monies, which have accumulated over $700,000 annually to various organizations though out the Cabarrus County area.

The Philip Morris, USA and the tobacco industry has changed over the last ten years. It is still a highly competitive and heavily litigated industry. The press and the industry’s own its doing has caused many Americans to view the industry as a selfish, money hungry, cancer, with no morals or ethics. Philip Morris and employees are trying to change that perception.

A thorough review of the textile industry and its surroundings indicates that Pillowtex inc. was justified in declaring chapter 11 bankruptcy protection on July 30, 2003. The bankruptcy filing and eventual job losses by 6, 540 nationwide and 4,000 in the Kannapolis, NC area was the largest layoff in North Carolina history. The company was facing unavoidable changes in automation and technology, new supply chain issues, heavy overseas competition, and an uneducated, declining workforce. The filing also ended an unethical and immoral pattern towards its employees.

The no recognition of Short and long term profitability was the key issue behind Pillowtex’s bankruptcy filings. It was the second filing since emerging from bankruptcy in May of 2002. Pillowtex was a leading textile manufacturer of bed pillows, down comforters, mattress pads, blankets, and throws for over 100 years. Since the 1990’s,