All About the Money

Lawyers be damned, that's what I'm saying. Rumor has it local tobacco product maker Reynolds American is seriously considering jumping into the "smokeless tobacco" market. The reason being that cigarette sales are down; in fact they have fallen every year since 1981, according to the USDA. Sure, it sounds like a viable plan but wait a minute we aren't talking about the declining sales of beanie babies or eight track cassettes. We're talking about cigarettes, a product that's absolutely been linked to cancer. The product liability of which has darn near bankrupted the industry.

That's why it was no surprise back in 1985 when RJR tried to divest its self of the stigma by buying Nabisco, and focusing some of its marketing on consumer products. Of course many years, a leveraged buyout and lots of lawsuits later, the company continues to make cigarettes. So at what point does the company just throw up its hands and say to hell with it, let's expand tobacco operations? Surely the management at RJR doesn't think that smokeless tobacco products are free from danger. It's only a matter of time before trial lawyers get a hold of a couple thousand people with lip and gum disease and sue the remaining pants off this company.

Look, I think folks should be free to do what they want with their free time, including smoking cigarettes. At the same time I think folks should take some personal responsibility and not blame someone else because they developed cancer as a result of smoking. However, I have little pity for an industry that by in large lied about the effects of smoking, and then later tried to cover up the fact that they knew about it.

Ultimately the original decision to spin off the cigarette business was a defensive one. Given the legal climate, it's only a matter of time before punitive sanctions imposed by the courts put this dying horse out of its misery. On some level the management probably believes it can squeeze a little more profit before the entire thing goes up in smoke (so to speak).

Face it, when it comes to corporations that mismanaged, misrepresented, and generally screwed over the little guy (Enron included); RJR Tobacco in its many forms sits high atop the list. When history judges this one, I hope that this company's name serves as a bold reminder of how a corporation shouldn't do business.