An Interview With Guillermo León
President, León Jimenes Cigars
From the Print Edition:
Chuck Norris, Jul/Aug 98
(continued from page 7)
CA: Was this change in the number of factories as sudden as you describe it ?
León: It wasn't a surprise for us; we had talked about it in the company and we expected it, but it did cause harm. The newcomers damaged the big cigar companies because they would go to the tobacco growers and offer them double of what was stipulated in the contract. Naturally the tobacco growers would remove their better tobacco and hide it to sell to the newcomers. We had to go to the tobacco growers and look at the tobacco and tell them it wasn't good enough. We had so many legal problems, but we had to fight it. That same problem existed with the Dominican tobaccos: olor, piloto Cubana and [tobaccos] from San Vicente. It was all a headache. We ended up buying the tobacco, but we had financed it at about 1,400 pesos, which at the time was about $100 for 100 pounds, and we received it at 3,400 to 3,500 pesos.
CA: In 1996?
León: Yes, the same year the price increased nearly two and a half times, and in some cases, three times. Wrapper tobacco was even worse. Whatever arrived at the factory, that was the amount of wrapper you were going to find in the market unless you were a long-standing client of one of the big wrapper companies. We were fortunate because we had that kind of relationship, someone to sell to us, like Culbro in Connecticut. They never failed us. But I do know that many factories were affected by this because those little factories paid more for the tobacco and often got it at the expense of the big factories. The small guys could do it because they didn't have a lot of overhead expenses, just the tobacco rollers and the owner and that was it. That wasn't the only thing. The newcomers also robbed us of tobacco rollers. We had to start up a school in Aurora, and we ended up training 300 to 400 rollers in one year.
CA: And how many tobacco rollers did you lose in that time?
León: Three hundred fifty. But truthfully, I trained the rollers for the newcomers, so that they would leave my tobacco rollers alone.
CA: But you practically changed all the laborers in the factory.
León: No. The new factories didn't necessarily take the veteran rollers, although we did lose some. The new cigar rollers had inferior working conditions to the older ones. The older ones were permanent and had a lot of benefits. We would give them uniforms, we would give many more things to the ones that were permanent and who had a long time at the factory. The new guys would feel that they already knew how to roll tobacco, and deserved the same kind of treatment. So, the new factory owners would offer them better conditions, thinking that these recently trained people did indeed know how to roll tobacco, so they would take our newly trained rollers. That's what happened in many factories, not just ours. I would have to say to probably all of them. For that reason maybe the robbers did us a little less harm. But we still had quite a bit of turnover in personnel, which wasn't good for morale. That happened even though we would warn the rollers that once they left they couldn't come back, and they were heading into a situation that could only be temporary. But they would still leave. I have not changed my mind. The ones that left I will not take back. But I imagine that other factories are probably letting them back into their old jobs. At least some of them.
CA: How long did this situation last?
León: We had been anticipating since mid-1997 that things were going to change again, and a lot of the start-ups would begin closing. And the truth is that that is the way it went. It was as if there were suddenly many people that woke up from a dream. That is to say that many people finally realized that the business of making tobacco is not something that you can just start up from here to tomorrow if you don't have traditions, and so on. By August of 1997, factories started to disappear. There are quite a few factories that have closed but are filled with inventory.
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