Altria Group, Inc, the parent company of Phillip Morris USA, announced its plans to move U.S.-based cigarette production for non-U.S. markets to its facilities in Europe. Because of declining U.S. cigarette volume, Altria Group also decided to close its Cabarrus, NC manufacturing facility and consolidate manufacturing for the U.S. market at its Richmond, VA Manufacturing Center.

Altria Group, Inc. said that it expects Philip Morris USA to record an initial pre-tax charge of approximately $325 million or $0.10 per Altria share in the second quarter of 2007 for costs related to the program, primarily for employee separation, with additional estimated charges of approximately $50 million for the remainder of 2007.

“PM USA recognizes the profound impact the closing of the Cabarrus cigarette manufacturing facility has on employees and their families. As the company works to reduce manufacturing overcapacity, it will address the adverse impact on employees by relocating as many as possible to jobs in Richmond and offering separation benefits to those it cannot relocate,” said Mike Szymanczyk, chairman and chief executive officer of PM USA. “It is my hope that the majority of employees at Cabarrus will be able to relocate to Richmond.”

Total expenses through 2011 will be about $670 million at Philip Morris USA, including accelerated depreciation charges of $143 million, employee separation expenses of $353 million and relocation costs, partly offset by gains on sales of land and buildings, of $174 million.