
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, October 14, 1995                   TAG: 9510160032
SECTION: BUSINESS                    PAGE: A4   EDITION: METRO 
SOURCE: ASSOCIATED PRESS
DATELINE: NEW YORK                                 LENGTH: Medium

RJR HEADS FOR SWITZERLAND

RJR Nabisco plans to cut costs and light a fire under global sales of its cigarettes like Winston and Camel by eliminating about 5 percent of its domestic tobacco jobs and moving its international tobacco headquarters to Switzerland.

Virtually all of the 575 job cuts announced Friday will be in Winston-Salem, N.C., where RJR's R.J. Reynolds Tobacco business is based.

Reynolds is the second-biggest tobacco products company in the United States but has been losing ground in the battle for market share as Philip Morris Cos., with its Marlboro brand, has widened its lead.

While analysts described the two moves as modest gestures, they are being made as RJR Nabisco executives are under increasing pressure to boost the stock price or otherwise deliver more value to shareholders.

In addition to tobacco, RJR owns 80.5 percent stake in Nabisco Holdings Corp. which makes Oreo cookies, Ritz crackers and Planters peanuts.

``We have high expectations regarding the future impact of this program to reorganize and streamline both the international and domestic tobacco businesses,'' RJR's chairman and chief executive, Charles Harper, said Friday in announcing the tobacco restructuring.

RJR said the actions would reduce earnings by $160 million in the fourth quarter. By 1997, Harper said the moves should begin generating more than $150 million a year in extra income. Other company officials said those restructuring gains will be reinvested in supporting the brands.

John C. Maxwell, tobacco analyst for Wheat First Butcher & Singer, estimated that RJR's share of the domestic tobacco market fell to 25.9 percent in the 12 months ending in June from 28.3 percent a year earlier.

Maxwell characterized the job cuts as some fine-tuning by RJR.

``All of these companies are continuing to try to find ways to cut overhead and be more efficient,'' he said.

RJR is also moving its international tobacco headquarters to Geneva, Switzerland, from Winston-Salem, where it employs 160 people.

The company said 75 of those jobs will be eliminated but that 85 other employees will be offered jobs in Geneva or elsewhere in RJR.

The international tobacco division already operates two regional offices in Geneva. Company officials said consolidating those offices with the main international office would put top international managers closer to their key European markets and eliminate duplicated costs.

The company said the move of the international base had nothing to do with anti-tobacco litigation in the United States.

by CNB