Time: 2022-09-04
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Phillips-Medisize, a subsidiary of e-cigarette supplier Koch Industries, which makes plastic boxes for Juul products, announced layoffs.
Phillips-Medisize laid off 99 workers at its Hudson, Wisconsin, factory that makes plastic boxes for JUUL e-cigarettes. The layoffs were sparked by an order from the Food and Drug Administration (FDA) that stripped JUUL of the right to continue selling its device and four pod products in the U.S.
Koch Industries backs several contract manufacturing for Big Tobacco, but its direct financial interest in the vaping business is not widely known.
The Phillips-Medisize facility announced in a July 1 letter to the Wisconsin Department of Workforce Development about 25 percent of the layoffs, which are required by federal law. The company added in the letter that if it becomes necessary to stop production altogether...we expect to permanently lay off around 225 employees, which may be phased in until October 12, 2022.
The Hudson facility is one of 26 Phillips-Medisize facilities around the world, including three others in Wisconsin that have not yet been downsized. Molex acquired Phillips-Medisize in 2017 after Koch Industries acquired Molex in 2013.
JUUL has long been the most popular e-cigarette brand in the United States, and is partly owned by tobacco giant Altria, which, like Koch Industries itself, is a longtime board member of the American Legislative Exchange Council (ALEC).
In reviewing the Koch, Molex and Phillips-Medisize websites, I did not find any mention of JUUL devices or cartridges being products of the Koch Group.
"Well-known parts of Koch's industry include his cash dispensers at his Canadian crude oil processing plant in Minnesota and a paper mill in Georgia Pacific," noted Lisa Graves, a nationally recognized Koch expert and critic. "There are also some lesser-known parts, like the fertilizer plant he produces methane or the bitumen he sells for roads."
Graves, chairman of the CMD committee during the Clinton administration and former deputy assistant attorney general at the Department of Justice, added: "But even I didn't know his business involved using Altria's JUUL for vaping filters. I don't think it's surprising that Koch has financial ties to Big Tobacco.
Over the past two decades, ALEC and AFP have served as front groups for the tobacco industry in many state policy battles, including opposing higher taxes on cigarettes and smoke-free workplaces and plain pack requirements, promoting smokeless tobacco, and pushing for first-hand purchase laws Prevent local governments from tightening regulation of tobacco products.
After the FDA announced its ban on JUUL products on June 23, a federal appeals court suspended the injunction a few weeks later, and on July 5, the FDA said it had suspended the injunction pending further review of the company's application. Unless the ban is eventually lifted, JUUL will need fewer Phillips-Medisize plastic cartridges.
E-cigarette companies must seek FDA authorization to sell their products in the U.S. Although the federal agency approved a handful of vaping devices this year, it rejected more than a million applications, The New York Times reported.
The ALEC relationship between Altria and Koch Industries isn't the only political connection between Koch and the vaping industry.
The Koch-linked Consumer Choice Centre (CCC) has worked closely with the industry-backed World Vapers Alliance to run a series of advertisements to push for weaker regulation of vaping products in Europe, according to an investigation by the Daily Beast and French newspaper Le Monde .