Oral History Interview with Luther B. Pittman

[Begin Tape #1, Side #1]

KLEE: There it goes. The following is an unrehearsed interview with Mr. Luther Pittman of the Pinkerton Tobacco Company for the Kentucky Oral History Commission. The interviewer is John Klee. The interview is being conducted on at the Pinkerton Tobacco Company in . Mr. Pittman, just to begin, why don't you tell me about your experience with tobacco in general and with this company and how it came to pass?

PITTMAN: Well, in the beginning, I grew up on a tobacco farm, flue-cured tobacco farm in North Carolina, and I started working the tobacco industry when I was twenty-one years old with Liggett & Myers Tobacco Company in 1948, and . . .

KLEE: In what . . . in what capacity was that? Was that as a buyer?

PITTMAN: As a labor foreman. Then I became a buyer in 1952, and branch manager of operations in 1962.

KLEE: Those operations, were they manufacturing or just the buying and . . .

PITTMAN: Buying primarily and leaf proc-, leaf processing.

KLEE: I see.

PITTMAN: I spent some time, course, every season in . . . in on the burley market.

KLEE: Sure.

PITTMAN: And the longest stay I had in any place in , I spent twelve years in . . .

KLEE: [chuckle] Is that right.

PITTMAN: . . . on the market.

KLEE: Coming back to the same market every year?

PITTMAN: Um, hmm.

KLEE: Now, the tobacco there is the . . . the air-cured burley.

PITTMAN: Burley, right.

KLEE: Okay. And then what happened?

PITTMAN: In 1970, I . . . I was transferred to Pinkerton Tobacco Company in Toledo, Ohio, which was a subsidiary of Liggett & Myers Tobacco Company at that time. And I've been with Pinkerton ever since. I started out as a director of their leaf operations, and . . . later became vice president of the company and now am executive vice president in charge of the Owensboro operation where we have our only manufacturing facility.

KLEE: Okay, where . . . where else are there Pinker-, Pinkerton operations? I guess there's . . .

PITTMAN: Our corporate offices . . .

KLEE: Corporate offices . . .

PITTMAN: . . . are in . And two years ago, when we . . . well, let me go back. In 1980, the Liggett group, which was a parent company of Liggett & Myers Tobacco Company sold . . . sold . . . was bought out by Grand Metropolitan in London, and two years ago, Grand Metropolitan sold Pinkerton Tobacco Company to the Swedish Tobacco Company. So now we are a subsidiary of Swedish Tobacco Company and they relocated our corporate headquarters in .

KLEE: Um, hmm. Now you say you're a subsidiary of the Swedish . . . Swedish, so this . . . Swedish investors then became interested in . . .

PITTMAN: Yes, when . . . when Grand Metropolitan, which is a huge conglomerate in , their primary business is hotels, gaming houses, alcoholic beverages. They really had no interest in the tobacco business, so they disposed of both Pinkerton and Liggett & Myers Tobacco Company within the last two or three years.

KLEE: Yeah. Now how are the . . . what kind of relationship are . . . does the owners have? What kind of . . . where does Pinkerton fit into their scheme of things?

PITTMAN: Well, it was . . . I think it was an excellent marriage with Pinkerton joining Swedish Tobacco Company because with the combination of Swedish Tobacco Company and Pinkerton, make the two of us the largest manufacturer of smokeless tobacco in the world.

KLEE: I see.

PITTMAN: And up 'til this point, it has been an excellent relationship. The Swedish Tobacco Company gives the management of Pinkerton almost total autonomy as far as operations are concerned and they . . . they want . . . they naturally are like a lot of other foreign companies, they see the United States has the area of growth for the future, so therefore, they have made this investment in Pinkerton and they want to see Pinkerton grow. They want us to . . . to be able to invest in future growth in this country. And so we're . . . we're delighted with the arrangement.

KLEE: Let me back you up a little bit to when Pinkerton located here in . You were with the company at that point. Just review those things with me.

PITTMAN: Well, Pinkerton, which up until 1973 was solely a loose leaf chewing tobacco manufacturer. Primarily the . . . the major brand, which is still our major brand, is They were located in , and they had an old plant that was outmoded, plus they didn't have room to expand and they had had some very solid growth for several years and they had just outgrown the facility they had there. So it was a corporate decision made of Liggett, by Liggett & Myers which at that time was a parent company, to build a new manufacturing facility and was selected. And so we combined a . . . the smoking tobacco and plug chewing tobacco, which was owned by Liggett & Myers and manufactured in St. Louis, and the Pinkerton Tobacco Company here all under one roof as the Pinkerton Tobacco Company. And so we've been here now since 1973. We have a manufacturing facility here which is the only one Pinkerton has. We have about four hundred thousand square feet of manufacturing space. We employ about five hundred people here in . . . in . And with our corporate staff in Richmond of about fifty people, and about a two hundred man sales force scattered around all over the United States, we have . . . the company has total employment of about seven hundred fifty people.

KLEE: I see. When that decision was made about , it . . . it's kind of interesting because at one point in history, had a lot of manufacturing of tobacco throughout the state, and you know, there's really not that much manufacturing left, actual manufacturing. Philip Morris in and a few others. What went into that decision? Was that to be close to the source of the tobacco or what kinds of things?

PITTMAN: That was one of the primary things, was the source of tobacco. Course here at Pinkerton, with our product mix, and we make about thirty different products, and we have about forty percent of industry in the loose leaf chewing tobacco, which does not use . . . ironically does not use Kentucky grown tobacco. It uses tobacco grown in . . . cigar-type tobaccos grown in , , . But we also are in the plug chewing tobacco business, and we have about sixty-five percent of that market and we do use burley, one-sucker . . . a little Green River, and . . . which is all grown right here in .

KLEE: Right here in the area, uh-huh.

PITTMAN: And . . . but the primary reason for selecting was a combination of things. It was almost in the geographic center, not only of our supplies for raw material, but also for our distribution of our product. And . . . and another thing that persuaded our search team to select Owensboro was the stability of the work force here in Owensboro, utilities, and the tax base, which we found very . . . very amenable to our . . . our needs.

KLEE: Okay. The . . . the state and the city here, I guess, were cooperative and . . .

PITTMAN: Most cooperative. We had an excellent cooperation from the state Commerce Department, the city/county governments here in assisting us to locate here. In fact, well . . . I think we began our location, we bought . . . purchased the land here in early `71 and started construction and we began moving in and started operations here in late `72, and we got in full production in mid-`73.

KLEE: Um, hmm. Gee. Your . . . again, just talking about your personal history and how it dovetails with the company, I guess you had several choices to make as these companies went from one [chuckle] . . . one ownership to another. I guess you're happy with those choices, or can you review those with me?

PITTMAN: Well, yes. You know, even with the . . . the changes that we have seen in the company and the ownership or the stockholders of the company, I feel like that each time we've made a change, it has been an improvement or beneficial to Pinkerton to do so because each . . . each time we have made the change, and especially with our last change, by being back with some people that are in the tobacco business and know and understand the tobacco business, they . . . they have a lot of faith. They think there's still growth in the tobacco business, and they wanna continue, wanna reinvest and continue to make this business grow.

KLEE: Are there any individuals, either in this country or in Sweden that are particularly . . . I mean, that you have a lot of dealings with that, you know, you have to make those decisions?

PITTMAN: Well, we do certainly have . . . the chairman of our board at Pinkerton is Klaus Unger, who is also the president of Swedish Tobacco Company. And we have a couple of other Swedish gentlemen on our board of directors.

KLEE: Is it a . . . a . . . is it a privately owned company or is there . . . is there stock?

PITTMAN: Well, at one time. Up until, I think, and I really don't remember the year, but I think it was 1968. From 1915 'til 1968, Swedish Tobacco Company was a government owned company. Was called Swedish Tobacco Monopoly. And then it became a public company, and now Swedish Tobacco Company is a part of a Swedish conglomerate called Procourdia. And Procourdia is . . . is partly owned by the Swedish government and partly public. And it looks like, from where I sit, that they are in the process of going one hundred percent public. Probably sometime in the future.

KLEE: I knew that trend was going on there.

PITTMAN: Yes.

KLEE: There had been questions about which way to go. Let me talk to you about, or let me ask you about your production. Now you said that you . . . Pinkerton has about forty percent of the loose leaf business, which is chewing tobacco primarily . . .

PITTMAN: Right.

KLEE: . . . is that right?

PITTMAN: Right, loose leaf chewing tobacco.

KLEE: What are your . . .

PITTMAN: We refer to loose leaf chewing tobacco as tobacco that's packaged in a foil pouch.

KLEE: Okay.

PITTMAN: And of course, Red Man is our largest brand, and we manufacture five other brands of loose leaf: Work Horse, Red Horse, Granger Select, Union Standard . . .

KLEE: I don't . . . I don't guess you mind telling me what . . . what is . . . what are your major competitors in this market? What companies and brands?

PITTMAN: In the . . . in the loose . . . well, Conwood Corporation in is our . . . is our largest and number one competitor. And Lorillard, which owns Beech-Nut brand, is also a strong competitor. The Helm Tobacco Company in is another one. So really, basically, five companies in the are in . . . that are major players in the smokeless tobacco business . . .

KLEE: That's Pinkerton and Conwood, Lorillard, and Helm?

PITTMAN: Helm, and the Tobacco Company which . . . they are not in the chewing tobacco business, but they are the . . . the major player in the moist snuff business.

KLEE: Okay. Yeah, I wanna get in that in a minute. Let me ask you about the . . . the loose leaf. Do . . . are there . . . are . . . where . . . I guess in your . . . in your national headquarters is where you-all make the marketing types of decisions, what kind of products you're gonna run . . .

PITTMAN: Yes, in our corporate headquarters. We have our . . . at headquarters, our finance department, our sales department, and marketing department. And . . . and of course, our overall company administration.

KLEE: Right. What about research on a new product? Let's say that you were thinking about putting out another loose leaf product in the foil packages.

PITTMAN: Well, Pinkerton, as long as they were a subsidiary company of Liggett& Myers Tobacco Company, Liggett had a very large research department. And any research that was done, was done by . . . primarily by Liggett & Myers. And then, of course, as we became separated from Liggett & Myers, we did not have an R & D [research and development] department. And . . . but Bob Sidensticker became president of Pinkerton Tobacco Company in 1980, and a decision was made that if we were gonna stay in the tobacco business and grow, that we would have to build our own research facility, and staff it so we began about `80 or `81 and beginning to build an R & D department. Today, we have a, not a large R & D department; it's fairly small. It's . . . we have a fairly small staff. But we have a very adequate R & D department to develop new products and we have . . . we have . . . really, I feel like, and course that's one of the areas of my responsibility, and I feel like we have built an excellent R & D department and we will . . . we're beginning to show some results on this by what we've done and some of the new products we've introduced in the last two or three years. As an example, Red Man Golden Blend, which is a loose leaf chewing tobacco; Granger Select is another loose leaf, which have been very successful in the market place. We have a moist snuff on the market today that's been put on the marketplace now for about a year. It's a portion pouch, or individual portions of moist snuff in packets that we . . . we are seeing some growth on and we certainly see some signs of new products being introduced in the very near future.

KLEE: Someone . . . and really, I . . . you need to answer this question for me too . . . why is it that a company like yours, and I wonder if . . . you . . . you talked about the different kinds of products you have, and course, you know, Workhorse and Red Man and Granger Select in a way appeal to the same market. Why do you put different products in the market? Is . . . are there different . . .

PITTMAN: Well, there are different . . . the primary reason you do it is because of consumer demand. And this is one of the things that you find through research, that . . . okay, Red Man is certainly our bread and butter. It's a large brand. But there are certain . . . you've got a certain percentage of chewers that prefer a different kind of chew; maybe a milder, sweeter chew. Or maybe even to the other side, a product that is stronger and has more of a tobacco taste and with less sweetening. So all of these things we've tested. We . . . we also have our marketing research group here that do marketing research, product research, for us after the R & D department turns it loose. And they take that and test it with consumers and we thoroughly test products before we ever make a decision of going into test market or whatever.

KLEE: Again, I . . . I hate to make these assumptions. I'll ask you. What . . . what is your primary consumer group out there? In your, in the loose leaf tobacco?

PITTMAN: Well, in . . . in all of the smokeless tobacco, whether it's loose leaf, plug, or moist snuff, we find that most of . . . that our consumer is the working man, a person that uses both hands to work. Farmers, construction people, miners. I don't like to use this as a reference, but you would refer to them as a blue collar worker.

KLEE: Right. Um, hmm.

PITTMAN: And we do see more smokeless tobacco now being used by white collar people, and I think this is just a trend of things where people that have . . . that have come out of the work force as farmers and construction people, that have moved on into white collar jobs. Course there's, as you well know, the . . . the smokeless industry has had some decline in business in the last couple years, the same as any other tobacco product, but we've been fortunate we've been able to hold our share of market, and even gain some the last couple years.

KLEE: That . . . that was a question I was gonna ask you, and I wanna get into that a little later, but those markets, those traditional markets, course there are fewer farmers than there used to be, and miners and so forth. I guess that's posed a particularly difficult challenge for you . . .

PITTMAN: Yeah.

KLEE: . . . to try to . . .

PITTMAN: That's right . . .

KLEE: . . . try to keep your share in a . . . in a market . . .

PITTMAN: Yeah.

KLEE: . . . that's declining.

PITTMAN: And of course, with a . . . in a declining market, the only thing that you can do is try to get . . . literally take business away from your competitor cause that's the only place you're gonna have any growth.

KLEE: Right.

PITTMAN: And one of the things that we feel like in R & D, and one of the things that we're working diligently on is we feel like there are products or forms of products that have not been introduced yet, that there is a public demand for, that . . . that are more convenient, more discreet to use than . . . than the current products on the market. That's one of the things that we're working toward.

KLEE: Okay. Let me ask you about some of your other product lines before I ask about that. The snuff, it seems like that had quite a bit of popularity there for awhile, and then you don't hear as much about it now as . . . tell me about your products there and how that has gone.

PITTMAN: Well, the moist snuff segment of the smokeless tobacco industry did have, for a period of ten or fifteen years, fairly dramatic growth. For the last couple of years, it has not grown; matter of fact, it's declined a little. Say, over the last two years. And I think one of the things . . . course certainly some of the adverse publicity the tobacco industry has had has had some effect. I think unemployment, especially in the areas that these products are sold has had some effect on it. Plus, I think also that you could expect to see it's leveling out now. Up until probably fifteen or twenty years ago, the majority of moist snuff was sold in the north central part of the country to . . . to Scandinavian type people . . . Scandinavian extraction.

KLEE: That's interesting.

PITTMAN: And the moist snuff business, you know, there . . . there was not much particularly in the south, until ten year ago and some of the moist snuff manufacturers made a great deal of effort and . . . and spread the product throughout the south and it has grown. It grew very rapidly in the south. Was very readily acceptable because it fit the lifestyle of the people. And . . . but there . . . there again, so you could expect some leveling off then.

KLEE: Right. After that market had been introduced.

PITTMAN: Yeah. After that market expansion, which really happened.

KLEE: Right. What are . . . what are your product lines in that area?

PITTMAN: Right now, we have Renegade, which is a portion pouch. We have it, and it is in national distribution. We just completed national distribution of it last October. And it seems to be doing quite well. We do have another moist snuff product that we've had on test market for two years, and this is kind of the way you play the game. Put a product on the test market and it doesn't do well, you either let it die there or . . . or let it stay there. And we've just left it in the test market, and it's . . . it's still there. And we will eventually, I think, drop that one, and . . . but we do have plans to introduce some new moist snuff products this year.

KLEE: Is that right? Now when you do test market, it's just what it sounds like? You're gonna see how it sells?

PITTMAN: Exactly. We put it in a . . . in a small area, usually a couple of what we will call cities, and . . .

KLEE: Do you do some regional advertising?

PITTMAN: We will do what we would consider normal advertising if you had national distribution, cause we don't want to discolor it by working it too hard or spending too much money on it, advertise it. We would like . . . try to spend the same amount of money as we would on a national distribution, and . . . to see what the product does, and do you have a consumer demand for it, because that's the . . . the ultimate. If we don't have a product that satisfies a . . . the consumer or meets a consumer demand, there's no reason for us to sell it.

KLEE: One question I forgot to ask you, and you brought it up yourself, talking about where the snuff would sell. Your loose leaf tobacco, I guess it's . . . is it . . . sells in one region better than the others? South, I presume.

PITTMAN: Primarily in . . . in the southeastern part of the country. When . . . when you . . . when I say the southeastern part of the country, you take from . . . really, you can take the eastern half of the United States, from . . . draw, kind of draw a straight line from Kansas over to Pennsylvania and go from there to Texas and Florida and that's where the major part of the market is. Probably eighty-five or ninety percent of the entire loose leaf chewing . . . chewing tobacco market is in that area.

KLEE: What's you philosophy about, or what is the company's philosophy about marketing such products? Do you . . . do you just say, well this is where our market is, and we're just gonna worry about it here? Do you try to market from to ?

PITTMAN: We do. We try to market all over the country. We do market all over the country, but certainly we pay more attention to the market where the business is, and we do, let's say, the West Coast area where there's not that much business . . . matter of fact, we have our own sales reps throughout what we call an area that's eighty-six percent of our business in twenty-six states. And the remainder of the states, which most of them are in the western half of the United States, are covered by brokers, which we have to represent us in that area. Because we . . . we just . . . we don't feel like that we can afford to pay people and to work that area that we have a . . . that small amount of business.

KLEE: Right. On another product line, your plug tobacco, in a way, your smokeless tobacco is the most traditional . . .

PITTMAN: Right. [phone rings]

KLEE: . . . because smoking came in later.

PITTMAN: Yeah. Excuse me.

KLEE: That's fine. [pause in tape] We were talking about the plug and how actually that kind of tobacco, smokeless tobacco was here before cigarettes.

PITTMAN: Right.

KLEE: Cigarettes are really, I guess, a product mostly of the 20th century. I'm particularly interested in the plug, because you use local tobacco. Tell me about the product line there.

PITTMAN: Well, we make eleven brands of plug chewing tobacco, and course Day's Work is our largest brand. Apple, Brown's Mule, Tinsley, just to name a few . . . and it is. It's . . . it is a traditional product and . . . and one of the first major manufactured products of tobacco in this country, that's the plug chewing tobacco. Back in the . . . a hundred years ago, that was . . . that and pipe tobacco were the major uses of tobacco in this country, and there were several large companies that grew out of the plug chewing tobacco. As an example, Liggett & Myers Tobacco Company, which had a humongous plant in , and the original growth . . . original products and growth of R. J. Reynolds Tobacco Company was plug chewing tobacco. Those were two of the major players in the industry at that time. Now, neither one of those two companies manufacture plug chewing tobacco.

KLEE: What we . . . you mentioned some of your competitors. Are . . . are the same people that are in the loose leaf, are they in the plug too?

PITTMAN: Conwood is. And Brown & Williamson also manufactures plug tobacco.

KLEE: Do they?

PITTMAN: But . . . and that's about it in the plug business.

KLEE: In reference to your own operation here, you . . . we've talked about the snuff and the chewing tobacco or the . . . the pouch tobacco, and now the plug. How do those three measure in your business? I mean, is . . . which one takes the . . . more time or . . . I guess, say, percentage of sales.

PITTMAN: Well, let's see. Percentage of sales, I would say our loose leaf is probably . . . and I'm guessing because I'd have to do a little research . . .

KLEE: Yes, that's fine . . .

PITTMAN: . . . loose leaf, I would say, is probably sixty percent of our total sales was loose leaf.

KLEE: That's kindly the idea I wanted.

PITTMAN: Probably . . . twenty-five percent is plug chewing tobacco, and the remainder is smoking tobacco.

KLEE: Uh-huh. Now have those . . . has that kind of . . . has that been constant since you been with the company? Or has plug declined or . . .

PITTMAN: Plug has declined. Plug . . . plug has been declining for seventy, eighty years, and it's still continues to decline. Plug chewing tobacco declined in about . . . anywhere from six to ten percent a year. I'd say an average of probably eight percent. It's . . . it's been doing this and also pipe smoking tobacco. It's been through the same thing. It's declining at about eight percent a year, and it has been for the last fifty years.

KLEE: That's just something I guess you kind of put in your projections as you . . .

PITTMAN: Yeah.

KLEE: . . . as you're planning. You just say, well, we're gonna have to plan for this and gear up your manufacturing and so forth accordingly?

PITTMAN: Exactly. And, you know, as . . . as an example, we . . . we have . . . we have acquired through license agreement two years ago, the manufacture of R. J. Reynolds plug brands which are the large part of our plug business today.

KLEE: What are their brand names?

PITTMAN: That's Day's Work, Apple, Brown's Mule, and a couple of other minor brands.

[End Tape #1, Side #1]

[Begin Tape #1, Side #2]

KLEE: This is side two of a tape with Mr. Wittman . . . [chuckle] or Mr. Luther Pittman, excuse me. We're talking about the plug tobacco. Now, you say you use the one-sucker and some of the . Where . . . what is your . . . I guess . . . I know blends are secret, but . . .

PITTMAN: Yeah.

KLEE: . . . how do . . . just as much as you can tell me, how . . . what kind of tobacco goes into this product?

PITTMAN: Well, it certainly depends on the product, but the . . . I think we said eleven brands of plug chewing tobacco we manufacture here now, they run the scale of anywhere from a hundred percent burley to 25% burley, and some of the brands that we have, have twenty-five burley will have, say, forty percent one-sucker and have some flue-cured tobacco in them. So, it really depends on the brand what . . . how much you . . .

KLEE: Let me just kind of go through those. Now, we have a fire . . . a dark fire-cured tobacco here.

PITTMAN: Yeah.

KLEE: And then of course we have a dark air-cured. Do you use either one of those products?

PITTMAN: The dark air-cured is what we refer to as one-sucker.

KLEE: Okay.

PITTMAN: The dark fired, primarily the dark fired tobacco that's grown over here in western and middle is used for moist snuff. There is some used in . . . a little used in pipe tobacco in this country, but about . . . about half, almost half of the dark fired tobacco is exported to Europe primarily for use in pipe . . . pipe tobacco and roll-you-own tobacco, which is . . .

KLEE: Still more popular there.

PITTMAN: Still more pop-, much more popular there than it is here.

KLEE: So . . . but you do use it in your moist . . . moist products?

PITTMAN: In our moist snuff, we do use . . .

KLEE: The dark fired?

PITTMAN: . . . dark fired. And some of the air-cured.

KLEE: Okay, which is the one-sucker. Now the is right here in the area, isn't it?

PITTMAN: Yes, this is primarily grown right here in .

KLEE: Uh-huh. Now . . .

PITTMAN: And it's a . . . a very similar type to what we refer to as one-sucker which is grown over around Russellville and Franklin and Springfield, Tennessee. Just difference in . . . little difference in the seed and difference in the growing area, and maybe cultural practices make it a little different. They're . . . they're very similar tobacco.

KLEE: I have talked to people in Russellville, done some interviews there and I'm gonna try to talk to some people tomorrow morning that are farming in this area, but if you don't mind helping me, tell me a little bit about the differences. What . . . what kinds of qualities do these tobaccos have that make them unique to your products? For example, with the . . . the moist snuff, what does the . . . the dark fired do for that?

PITTMAN: Well, you . . . course the . . . the dark fired tobacco, as well as your dark air-cured type, are . . . have more body, heavier type tobaccos than your burley which is used primarily in cigarettes.

KLEE: Cigarettes, right.

PITTMAN: And again, your dark fired tobaccos, which are smoked, can get the . . . the dark fired or fired aroma . . . is . . . makes it a very unique product and . . . it has a very high flavor, smoke flavor, and . . . which makes it a very desirable kind of tobacco to use in not only moist snuff, but dry snuff and also [inaudible] some pipe tobaccos, especially in Europe.

KLEE: So you say this is . . . I mean, for the person that's using the product, it's a . . . it's a heavier . . . it's a more full-bodied . . .

PITTMAN: That's right. It's more full-bodied and you . . . it takes less of it to get tobacco satisfaction than, say, some other tobaccos.

KLEE: Right. What about that ? Where does that fit into your . . . into your uses?

PITTMAN: We have . . . we use some Green River here and . . . and unfortunately we don't use as much as we'd like to, but we do use some Green River in a couple of our plug brands, and also in one of our pipe tobacco brands.

KLEE: As far as a . . . excuse my ignorance, but I haven't been down during the growing season. Does that look just like, pretty much like air-cured burley?

PITTMAN: Well, no. The plant looks quite different in the field . . .

KLEE: Does it?

PITTMAN: . . . growing. You know, burley grows with a slightly greenish-yellow cast, where . . . and the leaves are . . . grow at an angle up the stalk. Where your dark air-cured tobaccos are . . . grow with the leaves out flat. It's a very green plant, and it never turns yellow, completely yellow before it's harvested. It's topped considerably lower, and . . .

KLEE: Planted farther apart.

PITTMAN: . . . apart, a little further apart, and . . . but by the . . . by the leaves being bigger and a little thicker, the yield per acre is about the same as it is on the burley.

KLEE: I see. When you purchase this tobacco, do you have your own buyers or do you use a dealer?

PITTMAN: Primarily we use dealer/buyers to purchase our tobacco. We have a very small leaf department. We have only about . . . well, we have three people here in in our leaf department. We have three full-time employees in where we buy tobacco up there, and also have a storage facility in . So we use dealers primarily to buy tobacco at auction for us, anywhere we buy it. And also if it's . . . if it's a burley or dark air cured type, we use dealers to process it because we don't have the facilities here to not process it, but redry it. We don't have a . . . a redrying facility so we use dealers such as Southwestern [Southwestern Tobacco Co.], Dibrell [Dibrell-Kentucky Inc. Tobacco Co.], A.C. Monk. We have used in times past, and certainly hope to use them again. Sometimes we use Parker [Parker Tobacco Co.], Vaughan [G. F. Vaughan Tobacco & Storage Co.] and . . . in . Hail & Cotton normally represents us on the dark fired market, then, in .

KLEE: Those . . . some of those companies you mentioned, [inaudible] Southwestern and so forth, are they here locally in ? I mean . . .

PITTMAN: Southwestern's office is in . They . . . they're a part of Universal Leaf . . .

KLEE: Right.

PITTMAN: . . . which is the largest tobacco dealer in the world.

KLEE: I was thinking about the . . . where the actual redrying takes place.

PITTMAN: That's in .

KLEE: It is in ?

PITTMAN: Yes.

KLEE: Okay. And they come down here and buy the . . . the darker tobacco and take it back up there and . . .

PITTMAN: No, normally that would be done . . . they have . . . also have an organization in . . .

KLEE: Okay.

PITTMAN: . . . that they called [inaudible] Tobacco Company. And they normally purchase the dark air . . . dark air-cured tobacco.

KLEE: Um, hmm. Okay. When you . . . when you're producing the plug, you use more of the leaf? I mean, you leave more of the leaf, isn't that correct? Or is it just wrapped in the leaf?

PITTMAN: Well, the plug is all leaf. We . . . of course we . . . when we purchase tobacco and it's stemmed, take the stem and dust out and then it's stored for a minimum of two years, preferably three, before we manufacture it into the product. And then we bring it into the plant from our storages, and blend it probably . . . the basic plug would probably have five or six grades of tobacco, and we blend it together, then put our . . . what we call casing or flavoring on it, press it into plugs and wrap it and ship it. It sounds like it's fairly simple, but it's a fairly complicated . . .

KLEE: [chuckle] I'm sure it is, right. I've seen the Parker Tobacco Company do their work, and . . . and, you know, seen the tobacco flying everywhere. You . . . when you're making your products, you need to try to get as much of the leaf as you can. I mean, as far as the bigger piece of it, at least, is that right?

PITTMAN: Oh yes. Yes, we . . . that is one of the things. And especially in our chewing tobacco. Not . . . not only plug, but also more important in the loose leaf chewing tobaccos and which we do stem all of our loose leaf chewing tobaccos here and it goes directly into the product because we store it from the farm in leaf form and when it comes in here, we stem it and it goes directly, blended directly for the product. And, you know, as an example in cigarette tobaccos, they . . . cigarette tobacco manufacturers can tolerate one and a half, two percent stem content. That's what we call it. Here, we try to have a . . . a maximum stem content of one-fourth of one percent.

KLEE: Gee.

PITTMAN: So it's difficult . . .

KLEE: Right.

PITTMAN: . . . to get the size product we want, with the stem content we want. And it's a . . . it is a continuous battle and one that we will . . . we don't think we'll ever win, but we certainly try.

KLEE: Try. Keep going at it. While I'm on that, there's a couple questions I wanna ask in reference to that. One thing, even Kentuckians would be surprised that there's tobacco grown in and and so forth.

PITTMAN: Yes.

KLEE: People don't realize, I guess . . .

PITTMAN: That's right . . . that's true.

KLEE: . . . that for some farmers, I guess in those areas, tobacco is an important product.

PITTMAN: Very important. It . . . it's certainly not as big as it is in Kentucky, but as an example, in Wisconsin, you have . . . well, there are several counties in Wisconsin that grow tobacco, but there are two basic counties. One in the . . . the county that Madison, the capitol of Wisconsin's in, Dane County, is the largest producer and then there's a county over on the western side of the state, Vernon County, over near La Crosse, which is a large producer. And yes, tobacco's very important to these people up there, same as it is here in , except on a small scale. Same as in . , at one time was the largest tobacco producing county in the .

KLEE: Is that right? [chuckle]

PITTMAN: But now they're probably growing, in , probably twenty-five million pounds of tobacco a year.

KLEE: I may be getting a little away from your expertise, but now in those . . . in those place, they don't have, I don't think, support programs and so forth. It's . . .

PITTMAN: In , they don't have support programs. There are only two states that don't have acreage control, poundage control and price supports, and that's and . Of course, in , you do have . . . you've got a very similar control program that you have here. Course in . . . in , the majority of your farmers that grow tobacco are Amish, and as you know, they just don't like the government to interfere with their business.

KLEE: Yes sir.

PITTMAN: So they've never had a control program in the state of .

KLEE: I was gonna ask, and again I don't know, you know, if you don't know this but how do you . . . how do you make arrangements for the purchase of that tobacco? Do you buy it right from the farm? Do they have warehouses?

PITTMAN: In and , we buy tobacco directly from the farmer. They don't . . . they don't have any auction. We send our buyers out and they . . . matter of fact, our buyers in these two areas are primarily farmers.

KLEE: Is that right?

PITTMAN: And they work for us on a commission basis. They go out after we set the price or . . . and they negotiate a price with the farmer to purchase his whole crop; not one grade, but his entire crop. And then we have a little form contract that the farmer and the buyer signs and we pay the farmer a dollar which binds the contract and give them a delivery date and then they deliver their tobacco directly to our warehouse. It's weighed, we pay them for it, and they go home.

KLEE: Right. I . . . in that process, I assume that you tell them how you want it, you know, how you want it stripped out or . . .

PITTMAN: Yeah. We have people that, you know, when they . . . when they start stripping tobacco in the late fall, we have people that will go around and visit them and look at how they're doing it and make suggestions. And even we have . . . especially our people in . They work continuously with the farmer year 'round. We help them with the agronomy problems and advise them on insecticides, things of this nature because, you know, without the farmer, we're no longer in business.

KLEE: That's true, uh-huh.

PITTMAN: And this is one of the things that we tried to really get across to the farmer, that sure, we are aware that the farmer can't survive without us. But we surely can't survive without the farmer either.

KLEE: Yes, right.

PITTMAN: And this is one of the things that we're, in particular, pushing for the last two or three years, is better cooperation and understanding with the manufacturer, farmer and the Department of Agriculture in Washington. We don't work closer together, try to eliminate the surpluses and keep production equal to demand, it's gonna help all of us. The government has a support program, the manufacturer, the farmer, and I think it's gonna work. It's . . . I'm beginning to see some good results from that.

KLEE: Course, this tobacco down here, that really isn't, I guess, a big part of your business, the one-sucker and the . . . and the fire-cured and Green River. They . . . they're part of the support program, too. They have kind of a separate . . . I mean they're . . . they're dealt with in general. How much . . . the air-cured burley, which is grown up in the central part of the state, and which is the state's biggest tobacco crop, how important is that to your products?

PITTMAN: It's fairly important. Now of course, when you compare us with the major cigarette companies, we are a very small player in the market place. But it is important to us. It's a very major part of our business and we certainly have a genuine interest in what happens to it.

KLEE: Right. Your products, you have the tobacco . . . I guess cigarettes or any product uses different kinds of . . . well, in particular the . . . the plug uses . . . I think you called it the casing?

PITTMAN: Um, hmm.

KLEE: Is that right?

PITTMAN: Right.

KLEE: Sweeteners or . . .

PITTMAN: Well, that's . . . yeah.

KLEE: That was . . .

PITTMAN: . . . really your flavor's in it. It's just terminology of the tobacco industry, throughout the tobacco industry. You call it casing rather than flavoring.

KLEE: Okay. Again, I, without letting out any corporate secrets, what kinds of things do you use there? Can you . . . can you say?

PITTMAN: Well, one of the things that we have always done, and we try to be very responsible, as a matter of fact, is anything that we use in the manufacture of our products, any additives that we use is . . . food-approved products that you can find on the grocery store and numerous products. We don't use anything that is not . . . does not have an approval for use for human consumption.

KLEE: Right. I guess . . . I . . . I'm not sure about the history accuracy of this, but you know, plug tobacco I guess literally used to be put in a . . . in a log or something and [inaudible] . . .

PITTMAN: Well that . . . that's . . . I understand. That's how the . . . the term "plug" got started was that, back in the old days here, here in Kentucky and Missouri, the farmer would take, literally take tobacco that he had maybe mixed with various things like molasses or corn syrup or whatever and . . . and plug it into a hole in a log, and then after it had been there a few days, split the log and take it out and that's how the word "plug" got started.

KLEE: Right. So, in reference to your company, you're still adding the sweeteners like he did . . .

PITTMAN: Basically. Basically. It's very similar.

KLEE: . . . but using technology and machinery to put out the product.

PITTMAN: Right. Right.

KLEE: What if . . . you were talking about the cooperation between farmers and manufacturers. One of the . . . one of the complaints that you sometimes hear, and it comes from both sides actually, is some of the companies are concerned about the quality of tobacco they're getting from the farmer. And of course, the farmer sometimes is concerned about the price he gets from the manufacturer. But have you seen a decline in the quality of the product that you have to work with?

PITTMAN: Yes, I have. The . . . and it's not a . . . to me, it's not really all the farmers' fault. So . . . you know, I've been . . . I grew up on a farm, I been dealing with farmers all my life, and the farmers that you see today that are still in business are pretty sharp business people.

KLEE: Yes sir.

PITTMAN: And they know what they can do and what they have to do. I think one of the problems back a few year ago when we did have a sharp decline in quality, that the manufacturers were as much responsible for that or maybe even more so than the farmer because the manufacturer accepted it.

KLEE: Yes sir. Didn't give price differentials.

PITTMAN: Didn't give any price differential for good, bad, or indifferent. And so therefore, you know, what . . . what incentive did the good farmer have to produce an excellent quality crop, when this guy across the road from him that handled his with a pitchfork that same money. And I think we have . . . we're beginning to see that turning around and I think the . . . the companies are more quality conscious now. And of course, there again, supply and demand control a lot of that. When you have a tremendous demand and short supply, that gets the thing out of kilter, and vice versa. If you have a large supply and short demand, then . . . then . . . then the responsibility is turned back to the farmer that you've gotta do a better job if you can sell your crop. So I think by . . . with the corporation, and I think we have seen the last five years much better cooperation between the manufacturer and the farmer and the government regulatory agencies where everybody's got a better understand of the other party's problem. And I think we're beginning to see the quality . . . or not . . . not think, I know, we're beginning to see the quality improve. It's getting better, it's better handled, and it's for the benefit of everybody.

KLEE: That . . . that answers that question well. I was gonna ask you, I wanna get back into that idea of research and development. I've seen some articles and some things that came out about different products that were being experimented on and so forth, is there anything you can . . . you can tell me about where you're going in that direction?

PITTMAN: Well, we introduced a product that's in test market now about a year ago called "Masterpiece" tobacco. It's tobacco that's in a bound form, that is a chewable product. It doesn't require consumer to expectorate or spit, and it gives them the satisfaction and the idea behind this product is that . . . for consumers of tobacco products, whether they be smokers or smokeless tobacco users, in certain situations where they can't smoke, which is becoming quite . . . having a . . . we've got quite a wide variety of those places today . . .

KLEE: You're right.

PITTMAN: . . . and certainly there are places that a fellow can't chew Red Man, so we . . . we tested this product with . . . probably we tested it more thoroughly than we ever have any product that we've ever put on the market. I think we tested this product over seven thousand consumers before we ever decided to introduce it. And we thought there was, and we still think, there's a consumer demand for that product on the market place. We still have it in test. We learn from the test market and that's one of the reasons you have test markets. We learned a lot from our test market. We learned from mistakes we made, particularly our people in marketing and sales, on how this product is presented to the public.

KLEE: Right.

PITTMAN: And right now, our current plans are that we will go into a new test market with some of the new ideas and we still think this product has a lot of potential to be a successful product. And we are . . . we're currently working on some other products, probably similar to this in some ways, and I'm not at liberty right now to discuss them, but we think that there are still some products to be developed that haven't shown up yet on the market place.

KLEE: Right. In reference to the comment you just made, it sounds like you had . . . you were encouraged by some success, but also, you know, it was a wait-and-see attitude . . .

PITTMAN: Yes it is.

KLEE: . . . that there's still some problems you need to work out.

PITTMAN: That's right. That we still have got some problems to work out. To be very honest with you, I'm not totally satisfied with the product that we have. We think we've got the technology to overcome that, and also some other things, you know . . . there's so many different things involved when you introduce a product. Packaging. Is the package acceptable? The price of the product. But above all, consumers demand and then after you meet the demand, do you meet consumer satisfaction? And so, it's a combination of all these things and . . . and by being a totally new concept of a tobacco product, yes, we made some mistakes and we're the first ones to admit it and we're trying to correct those mistakes. Hopefully we will within the next six months, then we'll try it again.

KLEE: I guess there was kind of a ripple that . . . when the at news was announced that this was . . . this was possible and that, you know, someone was working on this. How did you-all feel? I mean, was there . . . I guess, you know, was it . . . do . . . do you mark it as a success for your R & D department?

PITTMAN: Well we do. I mean, as far as our R & D department is concerned, we . . . we consider it a tremendous success because we . . . we . . . and we've worked on this product for four years before we ever introduced it. But we produced the product that we set out to produce, and . . . and yes, it was difficult because there was nothing, there was no kind of technology that was known to really do this. And so . . . I mean, not only developing the product, but we also had to develop the manufacturing technology and techniques and equipment. It's . . . we have done that and so we still think that there's a product that has a consumer demand and maybe we're a little early, but it's better to be early than late. You're gonna keep trying.

KLEE: Yeah. How do . . . consistency seems to me would be a problem for you. I guess you have chemistry departments that make sure that the Red Man you're producing now is the same one that you produced a couple years ago to maintain the consistency. You know, there's a problem, I guess, with . . . as you say, every . . . every year the tobacco's different because of weather and place and handling.

PITTMAN: Well, this is . . . this is the . . . yes, every . . . I've never seen two crops of tobacco alike. They're all different. And this is why when we manufacture our products, we try to use two or three different crops of each type of tobacco we use and slowly blend in one crop as we come out of another, so we don't change the product. Because we do try to main-, maintain consistency. That is the name of the game, keeping that product consistent, don't change it. As a matter of fact, when I came to . . . came to work for Pinkerton, I . . . I was with . . . had the responsibility of the blends and the purchase of all the leaf. And I was told by my boss that you could put anything in Red Man you want to, just don't change the product. So, you know, he did give me a lot of latitude. And . . . and yes, we do have an analytical lab that . . . that we analyze our products on a regular basis and we . . . course we buy our analytical equipment the same that you find in hospitals and other places. The high . . . high pressure liquid chromatographs, and those kind of things.

KLEE: I wondered if you had, I don't guess you have any master tasters or anything, but . . .

PITTMAN: We do. We have . . . we have an in-house taste panel that . . . well, as a matter of fact, we've got about three in-house taste panels that we use on various products, and also without our marketing research group here, we also have some outside panels that do taste tests on a product.

KLEE: Do these people burn out after awhile?

PITTMAN: Sometimes you will see burnout, but normally if you have a panel . . . let's say we have a panel that is exclusively for loose leaf chewing tobacco. We don't really do enough testing with that product to cause what you would call burnout, and if we do, and at times, you know, you'll have an individual that's on there, on the taste panel, and they'll say, "Look, you know, I've gotten to the place that I can't . . . I . . . I'm a little afraid of my own judgment. How about putting somebody else on it?" And then, as an example, on our Masterpiece, we do . . . we have a . . . an in-house taste . . . taste panel that . . . we've got about ten people, five females and five males on it. And they get together about once a week and of course we are continually making and experimenting with new products in the lab, and these people will sit down and taste them and then . . . use them and then fill out a questionnaire or . . . and make comments of what they think is good about the product, what they think's bad about it. And most of our people are pretty honest. They . . . they don't like it, they tell you, which is exactly what we want them to do.

KLEE: With that new product, and I guess with any new product, I know you . . . you have a general idea what consumers want. But you have a wide-open latitude. I mean, you can just . . . you can try any kind of tobacco or any kind of blend or . . .

PITTMAN: Right. That's right.

KLEE: Let me ask you really about three more areas of concern. As part of a . . . a foreign-owned operation, do you . . . what . . . what about your foreign market? Does the Swedish company try to market these products that you make here overseas or remain fairly separate?

PITTMAN: Well, there has been some cooperation, you know, since we haven't been a part of Swedish Tobacco Company that long, there has been some cooperation as far as developing products, and one of the places that we have . . . and of course they have been in the research business much longer than we have and they have a very sophisticated R & D department. And our R & D department and the Swedish Tobacco Company's R & D department have worked very closely together. Our marketing department has worked very closely with Swedish Tobacco Company, not only looking at the possibility of importing some of their products, but also exporting some of our products into some of the Swedish markets. Not only Swedish markets, but other European markets, and of course, there again, Swedish Tobacco Company, which they make cigarettes and moist snuff, pipe tobacco, cigars . . . but primarily cigarettes and moist snuff tobacco. And is the largest per capita user of moist snuff in the world. And they purchase most of their tobacco here in the . Matter of fact, Swedish Tobacco Company has a permanent leaf department here in the , located in . Right now, Swedish Tobacco Company's got about four or five people down here in on the dark fired market today, buying tobacco.

[End Tape #1, Side #2]

[Begin Tape #2, Side #1]

KLEE: This is tape number two, February 5, 1988, with Luther Pittman for the Kentucky Oral History Commission. When you . . . whenever you talk about tobacco today, it . . . it's hard not to bring up the . . . well, the . . . it would be remiss not to bring up the health issue and how that's impacted on you. How . . . has . . . was the impact late coming to the smokeless tobacco? It seems like, you know, course I guess it was a smaller share of the market, so they concentrated on cigarettes.

PITTMAN: Well, they did. They concentrated on the cigarettes, but then as you know, legislation was passed against . . . well I saw against smokeless tobacco what, a year ago? A year and a half ago? And primarily, I think some of the legislation that they passed against smoking tobacco was some of the things that some of our anti-tobacco people in Washington had wanted for years against the cigarette people, but hadn't been able to do it, so they thought if they could get it . . . since we are a small industry, if they could get this legislation passed against the smokeless industry, then they could go back to the cigarette industry and get the same thing done.

KLEE: What . . . I'm sorry. What is that in reference to, as far as .

PITTMAN: Well, this is on the . . . on the health warning labels that Congress passed, the edict that they had for . . . and also some of the restrictions on advertising was a little more severe than it was in the . . .

KLEE: Was it?

PITTMAN: . . . the cigarettes and we feel that was one of the reasons for that. As far as research is concerned, you see all these research papers and articles in the newspaper, and strangely enough, every newspaper in the country's got a tobacco expert. But . . . and they all hang their hat on one piece of research, on the smokeless tobacco, and that was the famous Deborah Winn study of dry snuff users in North Carolina. And Deborah Winn made this study as part of her preparation for her Ph.D. It was . . . and even since then, she has admitted that it was not a very good research project. She . . . she made research on women over fifty years old in North Carolina that had used dry snuff, that had oral cancer. She didn't . . . in . . . in the . . . in that study, she didn't cover anything about had those people ever been to the dentist, what kind of oral hygiene they had, and most of it was second- and third-hand information from relatives and some of these people were ever deceased that she had included in her study. So we feel like it was a pretty shoddy piece of research work, and . . . and we've doe a lot of research ourselves, and we continue to do so. And you know, as an example, when you're talking about smokeless tobacco, and of course a big thing that you've seen in the newspapers has been oral cancer. As I say, has the largest consumption of smokeless tobacco in the world. It's more than double the adult consumption here in the . Yet 's rate of oral cancer, which they have excellent records in , is about half of what the is, but then in , doesn't have any smokeless tobacco use, or very little, and their rate of oral cancer is double that of the . So if the problem is with smokeless tobacco, we can't find it.

KLEE: Right. And re-, what you're saying, course the cigarette studies are numerous and . . . but there . . . there really hasn't been that extensive a study on the smokeless tobacco in . . . in the .

PITTMAN: That's right.

KLEE: When you . . . you said every newspaper has a tobacco expert, you . . . in other words, kind of being facetious there . . .

PITTMAN: A little bit, yes. But yeah, you know, you can read any newspaper . . . most of the articles that you'll see in the local newspapers are from the major wire presses like AP and UPI . . .

KLEE: The reason I brought that up, I just talked to the fellow that used to write for the Herald a long time, Carlyle Besuden, and he told me that they haven't replaced him on the Herald and he was under the impression the [Louisville] Courier-Journal didn't have a farm editor anymore, so in . . . in fact, you know, as far as a person there at those papers, like you say, they pick up the AP things and the other wire services, but really having a farm reporter it's kind of . . . kind of lax. How did that . . . how did . . . how did . . . how have those studies and those restrictions affected your . . . your business?

PITTMAN: Well I have to say they haven't had any effect on them, I think, would be totally wrong. They have. Certainly they've had some effect on us. It's . . . it's been a very difficult thing to overcome. And of course, it has been Pinkerton's policy all down through the years, and certainly is our policy now, that we . . . responsible manufacturers of a legal product, we have a very strong selling code that we don't advertise, sample, or sell our products to anyone under eighteen years old. We make . . . we manufacture adult products for adult use. And we are very strict about that. And that . . . we . . . we feel like we are manufacturing a product that has a consumer demand and it's . . . for consumer satisfaction and we're gonna continue to do so.

KLEE: Course your research is going in that direction.

PITTMAN: Absolutely.

KLEE: How do you . . . how do you . . . I know that, you know, you have the interest of selling a legal product, and then you have the anti-smoking forces looking at your every move. How do you reconcile those two things? I guess you just . . . you just walk an extra-careful line?

PITTMAN: Well, certainly, we look at the . . . the anti-tobacco forces and their . . . what they publish and, you know, some of these people, some of these anti-peo-, -tobacco people that have become, you know, quite emotional about the whole issue and . . . and it's very difficult and of course, you know, one of the problems is if we start defending ourselves, the first thing they say, "Oh yeah, well certainly, it's natural for you to defend yourself because you . . . you're in the business, but . . . so that . . . that even makes it more difficult. But, you know, I don't mind being accused if I'm guilty, but if I'm not guilty, don't accuse me, and if you do accuse . . . you do accuse me, show me the proof that you've got, and so far nobody's shown that proof.

KLEE: Yeah, the legitimate . . . what about the . . . I don't wanna miss any of your products. We've talked about three major areas, the loose leaf in the foil package, in the plug, and the . . . the moist snuff. Is there any other products that we missed? Do you do any of the . . .

PITTMAN: We manufacture five brands of pipe tobacco: Velvet Granger, Black Clipper, and a couple roll-your-own products . . .

KLEE: I wondered if you did any of that.

PITTMAN: . . . Virginia Extra and we're also making an old traditional brand that's sold up in the central part of the called Plowboy, which is a roll-your-own.

KLEE: In the little pouches?

PITTMAN: Yes, in the pouches, and also though the canister, the fourteen ounce can.

KLEE: Okay. So there's still a little bit of . . . still a few people out there rolling their own cigarettes?

PITTMAN: Oh yeah.

KLEE: Who makes . . . I guess . . . I guess somebody else makes the paper for that?

PITTMAN: Yes, we . . . we buy our cigarette papers from a supplier. I really don't even remember the name of the company, but we . . . matter of fact, we even market two brands of our cigarette paper. Of course, we put cigarette papers in our roll-your-own packages. And, you know, as an example, Velvet is the largest pipe tobacco brand we make, and we put it in three different packages, the 14 oz. can, the pocket tin, and the foil pouch. And through market research, we've found that the consumer that buys the pocket tin primarily roll-your-own. And he likes that pockets tin because he can thump it out in this paper which is a little difficult for him to get it out of the foil pouch. Matter of fact, we are the only manufacturer in the United States today that's manufacturing the tin can, or the pocket tin.

KLEE: Oh is that right? You talked about, earlier, seven hundred fifty employees, you know, overall, but there's lots of . . . you've got lots of people that are indirectly responsible for their jobs to you. You've got the people that make the cans and so forth. Those . . . any of those suppliers here locally? Do you have to go all over the place to get people? I'm sure you do . . .

PITTMAN: Well, yes. Course our pocket tins are manufactured here locally. And course the . . . naturally with all the wrapping materials that we use, we have, you know, shipping containers, cartons, aluminum foil to name just a few. We have one of our . . . one of our major suppliers in cardboard cartons is in . Another one is in . Another one is in .

KLEE: For example, on your foil packages, where it's printed "Red Man" that's done somewhere else?

PITTMAN: Most of that . . . most of that . . . we do have two suppliers on . . . on our foil for Red Man and our other loose leaf tobaccos, but most of it is manufactured by Reynolds Metals.

KLEE: I see.

PITTMAN: Which is also a corporation. Matter of act, Reynolds at one time was in . Matter of fact, I think they started in .

KLEE: You're the boss. I don't know if I . . . I don't know, maybe I'll need to talk to somebody out in the hall or whatever, but these people seem to be very free as far as . . . I mean, I've seen them walking around the hall. And what kind of place has Pinkerton been to work for, for you and for the company? I mean . . .

PITTMAN: Well you . . . you use that term "boss." We don't use . . . really use that around here. Our people . . . we look at one another as associates or co-workers. I don't think we look at any anybody as being the boss. Of course, everybody's gotta have an umpire somewhere.

KLEE: Sure. [chuckle]

PITTMAN: To make the last decision if it becomes necessary. But one of the things that we have . . . management tries to convey to all of our people, regardless of what level they're on, is that you are a part of the company. Your job is as important as mine. I just happen to have one job, and maybe you've got a job doing something else, whether it's sweeping the floor or being a mechanic, but all of these people are important. We've got to have them, and so we try, and we try to instill in our people this kind of feeling. We . . . we try to help our people and I think we've been successful at having a relaxed attitude, and you know, as that perfect example, I was talking to one of our mechanics the other day, and he was telling me some of his problems because my door is always open. Anybody can come in and talk to me anytime they want to. And he was telling me how many years he'd been working here and some of the problems he was having. I said, well you know, I don't see . . . doesn't seem to me like you really have a problem. I said, you don't need a supervisor. You've been working here fourteen years. You probably know more about the machines that you operate than anybody here, so why do you need a supervisor? He said, "Well, I really hadn't thought about it that way." And so that . . . you know, this is the kind of attitude we try to convey to our people.

KLEE: A lot of your people stay here a long time?

PITTMAN: Yes.

KLEE: Plant workers?

PITTMAN: We have very little turnover. I would say the turnover here in our work force here . . . and I really don't know, but it's . . . it's . . . very small. I would say it's less than one-half of one percent. We have an outstanding group of people here, and our pay scale is probably equal or better than the average in this area, so . . . and we have excellent benefits . . . hospitalization, retirement, and so forth. And so most of the people that come work here, got a home here. And that's the way we like to see it.

KLEE: Your-all . . .

PITTMAN: You know, when you bring in a new employee and you keep them for a year or two, you got a pretty big investment in training that employee. And we don't wanna lose them.

KLEE: Lose that investment. What about yourself? I guess, again, with the changes in ownership, there's been up and down periods for you, but . . .

PITTMAN: Well, I wouldn't really say we've had any down periods. We . . . most of it is . . . you're always looking for quality, what you're gonna do tomorrow, next month, next year. We haven't really had many down periods so to speak. I feel like I've been fortunate. I've been in this business . . . July first will be forty years, and . . . and so . . . of course, I'd been in the tobacco business all my life, and as I tell people, I've . . . I've all . . . I've spent my entire career looking for an easy job. I haven't found it yet. I don't think there's any such thing, and of course, I don't think that's any different from any other industry. If you do . . . do your job, it's not always that easy. But it has been enjoyable, I can tell you.

KLEE: What about the future for the . . . you know, you have such a variety of products and so forth, I guess over time, just like in the past, you're gonna see some go, and new ones come?

PITTMAN: Oh yeah. Well, you know, we're in the consumer products business, and looking at most consumer products, they have a life span, they will have a period of time of growth and then will go into a gradual decline, whether it be chewing tobacco, cigarettes, toothpaste, whatever. But . . . so, yeah, so that . . . this is one of the reasons we're so interested in research and product development because we do know that our products have a life span and so we wanna keep coming along with new products that will . . . and as, you know, as lifestyles change in this country, you have new demands. So we wanna be prepared to meet them.

KLEE: Um, hmm. You think that, despite the opposition, there's still gonna be a market place for tobacco products for a long time to come?

PITTMAN: Yes. I really do. I think . . . I think there will be some changes, but I think . . . and it may be a little more difficult conducting business with the regulatory agencies and so forth and the laws, but you know, the tobacco business has been here since the beginning of this country. Matter of fact, this country was based on tobacco, and I think we're gonna be here a long time. Sure, we'll see some changes. I've seen a lot of changes in the last forty years, and I think we will see some more. But we'll survive . . . we . . . and prosper.

KLEE: What about the . . . those major groupings that we've talked about? The pipe and roll-your-own, and the plug and the loose leaf? Any of those product lines you see someday disappearing? Maybe the plug?

PITTMAN: Yes. And as an example, in the smokeless tobacco business, I think probably . . . course we're not involved in it, we don't manufacture it . . . I would think probably the first you'd see to disappear from the market place would be dry snuff. And probably the next would be plug chewing tobacco probably. And it . . . it probably will eventually disappear because of lifestyles and also consumer demand, and also introduction of new products that will replace it.

KLEE: Might replace it.

PITTMAN: Right.

KLEE: Wouldn't be a point where you just say this is no longer profitable? You're gonna have to . . .

PITTMAN: That's right. They're . . . you know, every product gets to a place that it's no longer profitable to make. And certainly in the stable we have right now of about thirty-one products and brands, we . . . we have a couple right now we're taking a look at. Is it any longer profitable to manufacture this product? And . . .

KLEE: Well, I certainly appreciate you talking to me this morning. Thanks a lot.

PITTMAN: Glad to.

[End Tape #1, Side #1][End of Interview]