r. j. reynolds tobacco company type subsidiary industry tobacco founded 1875 1 founder richard joshua reynolds headquarters 401 n. main st. winston salem north carolina united states key people susan cameron ceo debra crew president and coo number of employees 4 000 2 parent reynolds american website rjrt.com the r. j. reynolds tobacco company rjr based in winston salem north carolina and founded by r. j. reynolds in 1875 1 is the second largest tobacco company in the u.s. behind altria . rjr is an indirect wholly owned subsidiary of reynolds american inc. which in turn is 42 % owned by british american tobacco of the united kingdom . contents 1 history 1.1 early history 1.2 rjr nabisco 1.3 recent history 2 marketing sponsorships and criticisms 2.1 joe camel 3 lawsuits 4 brands 4.1 uptown 5 facilities 6 see also 7 notes 8 references 9 external links history edit early history edit george washington early cut plug tobacco brand manufactured by reynolds the son of a tobacco farmer in virginia r. j. reynolds sold his shares of his father s company in patrick county virginia and ventured to the nearest town with a railroad connection winston salem to start his own tobacco company . 3 he bought his first factory building from the moravian church and established the little red factory with seasonal workers . the first year he produced 150 000 pounds of tobacco ; by the 1890s production had increased to several million pounds a year . 3 the company s factory buildings were the largest buildings in winston salem with new technologies such as steam power and electric lights . 3 the second primary factory building built in 1892 is the oldest reynolds factory still standing and was sold to forsyth county in 1990 . 3 at the beginning of the 1900s reynolds bought most of the competing tobacco factories in winston salem . 3 the company produced 25 % of america s chewing tobacco . 3 1907 s prince albert smoking tobacco became the company s national showcase product which led to high profile advertising in new york city s union square . 3 the camel cigarette became the most popular cigarette in the country . the reynolds company imported so much french cigarette paper and turkish tobacco for camel cigarettes that winston salem was designated by the united states federal government as an official port of entry for the united states despite the city being 200 miles 320 km inland . 3 winston salem was the eighth largest port of entry in the united states by 1916 . 3 in 1917 the company bought 84 acres of property in winston salem and built 180 houses that it sold at cost to workers to form a development called reynoldstown . 3 r.j. reynolds tobacco factory in downtown winston salem nc at the time reynolds died in 1918 of pancreatic cancer his company owned 121 buildings in winston salem . 3 he was so integral to company operations that executives did not hang another chief executive s portrait next to reynolds in the company board room until 41 years later . 3 reynolds brother william neal reynolds took over following reynolds death and six years later bowman gray became the chief executive . by that time reynolds co. was the top taxpayer in the state of north carolina paying 1 out of every 2.50 paid in income taxes in the state and was one of the most profitable corporations in the world . 3 it made two thirds of the cigarettes in the state . 3 reynolds co. s success during this period can also be measured by the concurrent success of many winston salem companies which received large amounts of business from reynolds wachovia national bank became one of the largest banks in the southeast and the company s law firm womble carlyle sandridge & rice became the largest law firm in north carolina . 4 r.j. reynolds tobacco diversified into other areas buying pacific hawaiian products the makers of hawaiian punch in 1962 sea land service in 1969 and del monte foods in 1979 . sea land was spun off in 1984 . 5 because of the company s diversification the company changed its name to r.j. reynolds industries inc. in 1970 . r.j. reynolds tobacco co. was a subsidiary . 6 rjr nabisco edit main article rjr nabisco r.j. reynolds industries merged with nabisco brands in 1985 and the name changed to rjr nabisco in august 1986 . 6 in 1987 a bidding war ensued between several financial firms to acquire rjr nabisco . finally the private equity takeover firm kohlberg kravis and roberts & co commonly referred to as kkr was responsible for the 1988 leveraged buyout of rjr nabisco . this was documented in several articles in the wall street journal by bryan burrough and john helyar . these articles were later used as the basis of a bestselling book barbarians at the gate the fall of rjr nabisco 7 and then into a television movie . as a result in february 1989 rjr nabisco paid executive f. ross johnson us 53 800 000 as part of a golden handshake clause the largest such deal in history at the time 8 as severance compensation for his acceptance of the kkr takeover . he used the money to open his own investment firm rjm group inc. 9 in 1999 rjr nabisco spun off r.j. reynolds tobacco which began trading on june 15 as r.j. reynolds tobacco holdings inc. and a year later announced it would buy nabisco group holdings inc. the company that had been rjr nabisco . this followed the sale of nabisco holdings group to philip morris . 6 recent history edit reynolds american inc. building in downtown winston salem nc in 1994 then ceo james johnston testified under oath before congress saying that he didn t believe that nicotine is addictive . 10 in 1998 the company was part of the tobacco master settlement agreement with 46 us states agreeing to pay smoking related health care costs and restrict advertising in return for protection against private lawsuits . in 1999 r.j. reynolds was spun out of rjr nabisco . the same year the company sold all its non us operations to japan tobacco which made those operations into its international arm jt international . consequently any camels winstons or salems sold outside the us are now actually japanese cigarettes . in 2002 the company was fined 15m for handing out free cigarettes at events attended by children and was fined 20m for breaking the 1998 master agreement which restricted targeting youth in its tobacco advertisements . 11 in 2001 2011 the european union was involved in three civil suits against r.j. reynolds in the united states district court for the eastern district of new york accusing the company of selling black market cigarettes to drug traffickers and mobsters from italy russia colombia and the balkans . the suits were unsuccessful . 12 13 14 15 on july 30 2004 r.j. reynolds merged with the u.s. operations of british american tobacco operating under the name of brown & williamson . a new parent holding company reynolds american inc. was established as part of the transaction . in may 2006 former r.j. reynolds vice president of sales stan smith pleaded guilty to charges of defrauding the canadian government of 1 200 000 000 cdn through a cigarette smuggling operation . smith confessed to overseeing the 1990s operation while employed by rjr . canadian brand cigarettes were smuggled out of and back into canada or smuggled from puerto rico and sold on the black market to avoid taxes . the judge referred to it as biggest fraud case in canadian history . 16 since 2006 r.j. reynolds has been the subject of a farm labor organizing committee floc campaign to reduce the exploitative nature of its tobacco procurement system . floc s goal is to meet with reynolds executives growers and workers in collective bargaining to improve farmworkers pay and living conditions . although there are many layers of subcontractors within the procurement system that seemingly absolve reynolds of responsibility floc asserts that its executives have the ability to make changes within the system due to their wealth and enormous power . despite repeated refusals to meet from ceo susan ivey floc continues the campaign against r.j. reynolds tobacco company . 17 in 2010 reynolds american announced that the company would close its manufacturing plants in winston salem nc and puerto rico . production from these plants will be moved to the tobaccoville nc plant . 18 on july 15 2014 reynolds american agreed to buy lorillard tobacco company for 27.4 billion . 19 the deal also included the sale of the kool winston salem and blu brands to imperial tobacco for 7.1 billion . 20 marketing sponsorships and criticisms edit from 1972 r.j. reynolds was a title sponsor of the nhra winston drag racing series the nascar winston cup series and until 1993 the imsa camel gt for sportscars . the nhra sponsorship lasted up to 2001 before a new governing rule stated the master settlement agreement restricting r.j. reynolds to one sponsorship of a sporting event ; as a result they chose nascar which lasted up to 2003 . the lotus formula one team was sponsored by camel from 1987 until 1990 . rjr brand winston was a sponsor of the 1982 fifa world cup whilst fellow brand camel was a sponsor of the 1986 fifa world cup . 21 joe camel edit in 1987 rjr resurrected the mascot for their camel brand of cigarette joe camel . joe camel an anthropomorphic cartoon camel wearing sunglasses was claimed to be a ploy to entice and interest the underaged in smoking . r.j. reynolds maintained that joe s smooth character was meant only to appeal to adult smokers . this criticism was reinforced by a 1991 study published in the journal of the american medical association 22 showing that more children 5 and 6 years old could recognize joe camel than could recognize mickey mouse or fred flintstone coincidentally fred flintstone was also once used to sell r.j. reynolds winston cigarettes and alleged that the joe camel advertisement campaign was targeting children despite r.j. reynolds contention that the campaign had been researched only among adults and was directed only at the smokers of other brands . in response to this criticism rjr instituted let s clear the air on smoking a campaign of full page advertisements consisting entirely of large type text which denied the charges and declared that smoking is an adult custom . in late 2005 r.j. reynolds opened the marshall mcgearty lounge in the wicker park neighborhood of chicago as part of a marketing strategy to promote a brand of superpremium cigarettes and counteract local smoking bans in restaurants and cafes that took effect in 2006 . the lounge which offers thirteen varieties of exclusive hand crafted cigarette along with alcohol and light food has been well received in the neighborhood and by the targeted upscale market according to company officials . the lounge has since been closed due to chicago indoor smoking restrictions . the company planned to open a second location in winston salem in the summer of 2007 but scrapped those plans within weeks of opening citing the increasing number of smoking restrictions in public places by state and local governments . 23 lawsuits edit in may 2011 a miami dade circuit jury awarded julie reese an 82 year old cape coral smoker represented by the ferraro law firm a total verdict of 1 million from r.j. reynolds tobacco after she developed laryngeal cancer and chronic obstructive pulmonary disease . the jury found reynolds to be negligent guilty of fraud by concealment and fraud conspiracy and guilty of placing a defective product on the market . 24 25 brands edit r.j. reynolds brands include newport camel