More CEO Testimony At Fla. Smoke Trial

(AP)  The head of the nation's No. 1 tobacco company testified Wednesday that cigarettes are a declining business and that his company is spending millions to keep its share of a shrinking market.

Testifying in the class-action lawsuit brought by sick Florida smokers, Philip Morris President and CEO Michael Szymanczyk said the $67 million his company spent last year advertising Marlboro cigarettes was aimed at keeping its current smokers from switching brands.

The company spent millions more advertising its other brands and on promotional activities, such as coupons.

“Manufacturers, retailers, wholesalers— all you can do is compete over a portion of a shrinking pie,” Szymanczyk said under cross-examination by smokers' attorney Stanley Rosenblatt.

The attorney questioned Szymanczyk's assertion about the industry being in decline. He quoted stock analysts who advise clients to buy tobacco stocks and a federal government report that showed teen smoking increased during the 1990s.

The pair also clashed over a Philip Morris program that the company says spends $74 million annually to end teen smoking. Szymanczyk says he doesn't want teenagers to smoke.

Rosenblatt questioned the company's sincerity, saying that since 90 percent of smokers acquire the habit before their 18th birthday, Philip Morris would eventually go out of business if no teens smoked.

”If that's what happens, that's what happens,” Szymanczyk said. Ending teen smoking “is the right thing to do.”

Rosenblatt then asked Szymanczyk why the company doesn't voluntarily fold if it agrees smoking is hazardous to its customers' health.

He replied that the other tobacco companies would simply take over Philip Morris' market share and 400 billion cigarettes would still be sold in the United States annually.

“We think the responsible thing to do is to try to reduce the harm caused by our product,” said Szymanczyk, who has previously testified about company efforts to create a less carcinogenic cigarette.

Szymanczyk spent his third day on the witness stand Wednesday. He will be followed on the stand by Nicholas Brookes of Brown & Williamson Tobacco Corp. Three other tobacco CEOs also are scheduled to testify.

The CEOs will tell the jury about how their companies have reformed in the face of lawsuits and public criticism.

Their testimony is part of a bid to dissuade the jury from requesting billions of dollars in punitive damages on behalf of 300,000 to 500,000 sick Florida smokers.

The six-member jury has already awarded $12.7 million in compensatory damages to three people in the nation's first class-action suit by sick smokers to go to trial.

The appearance of Szymanczyk (pronounced sih-MAN-sihk), and the planned testimony of the other tobacco CEOs, underscored the trial's importance. Tobacco executives generally keep low public profiles and arely testify under oath.

Witnesses for the sick smokers have estimated the five tobacco companies being sued could raise $150 billion to $157 billion to pay a punitive damages verdict. Those figures would dwarf the national punitive damages record of $3 billion, assessed against Texaco in 1987.

The other CEOs expected to testify are Andrew Schindler of R.J. Reynolds Tobacco Co., Martin Orlowsky of Lorillard Tobacco Co. and Bennett LeBow of Liggett Group Inc.


By Terry Spencer