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Excerpts from PHILIP MORRIS: INSIDE AMERICA'S MOST REVILED COMPANY

BY JOHN A. BYRNE, Business Week [11/29/99]

ASH NOTE: This article is BusinessWeek's cover story. The story profiles the leading figures in Phillip Morris. The website is located at http://www.businessweek.com/index.html

There is going to be a Day of Judgment. If there isn't a day up there, it's when you're lying on your deathbed. And you're going to say to yourself: 'Well, what did I achieve in my life?' It's not how much money you've made, or how big a house you've got, or how many cars. It's what you did for your fellow man. It's 'What did I do to make the world better?' That's what it's going to come down to.''

The man uttering these words seems as sincere as a pastor in the pulpit on a Sunday morning. Yet his many critics think of him and his corporation as a villain, a beast, even the devil incarnate. The speaker, remarkably, is Geoffrey C. Bible, chairman and chief executive of Philip Morris Cos. He oversees the world's largest tobacco company, arguably the most reviled corporation in America.

In the U.S., where more than 400,000 people die annually from smoking-related diseases, it could be said that Bible's company, with its 50% market share, is to blame for the often agonizing deaths of some 200,000 smokers a year. So how can Bible, of all people, speak so passionately about an individual's obligation to society?

That, of course, is a dilemma that each of Philip Morris' 144,000 employees must wrestle with. Rarely has an industry or a corporation been so deeply vilified and so thoroughly discredited as Big Tobacco and its biggest player, Philip Morris. Few employees have escaped the loathing heaped on their company. Almost all have faced The Question, the inevitable inquiry laced with accusation that sooner or later always gets asked -- at the PTA, a dinner party, or Little League: ''How can you work for a company that kills people?''

Indeed, Philip Morris is a company fraught with contradictions. In the past year, it has spent $ 100 million to persuade kids not to smoke. By the end of this year, it will have paid nearly $ 8.5 billion to reimburse states for the cost of treating smoking-related illnesses. But visit the company's New York corporate headquarters, where 8 of the top 12 executives are smokers, and it's clear that tobacco infuses the entire culture. Philip Morris received the only exemption to New York City's sweeping ban on smoking in the workplace. Ashtrays are built into the granite walls outside the elevator bank at every floor and also hang above the urinals in the men's rooms. Conference tables hold wooden boxes filled with Philip Morris cigarettes, and the scent of tobacco lingers in the broad, carpeted halls.

The contradictions extend to the company's uneasy relations with the outside world. Although widely despised, Philip Morris is one of the world's most generous corporations, annually contributing $ 60 million in cash and $ 15 million in food to fight hunger and domestic violence and to support the arts. Its employees give up to $ 5 million a year to charities.

None of that, of course, has silenced the company's critics, who insist the harm done by the company's products taints all else. ''At every opportunity, this industry has fought legislation that might have saved lives,'' asserts Matthew Myers of the Campaign for Tobacco-Free Kids. ''Their executives have lied about what they knew. And to a degree unmatched by any other industry that makes products that can harm people, they have gone after children.''

With its reputation -- and its stock price -- in shreds, Philip Morris recently embarked on an unprecedented campaign to rehabilitate its image. As part of that effort, it allowed BUSINESS WEEK behind the corporate veil for a series of candid interviews with managers of its far-flung operations.

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Philip Morris, however, has shown it can be successful in a declining business. Last year, with industry shipments down 4.6%, the company's stable of brands attained a record 49.4% share. This year, its share is expected to climb to just over 50%. Marlboro alone will account for one of every three cigarettes sold in the U.S. But as the company pays hefty settlement charges, doling out $ 3.4 billion last year alone, U.S. profit margins have plunged -- to 9.7%, down from 33.8% in 1996. ''Our objective is to take this business and to produce cash for the company to invest,'' says Szymanczyk, CEO of PM USA