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Demand for cigars burning out Pennsylvania plants feel pinch of the industry's decline.


YOE, Pa. -- Working with a rhythm perfected by years of repetition, Dorothy Burk unraveled a leaf of thin, light brown and silky smooth imported cigar tobacco and spread it onto the roller of a stripping machine. In less than a second it cut the vein from the leaf and divided it in half.

"It's the same machine we used when I got into this business when I was 18," the silver-haired 68-year-old said of the equipment, which looks like something you might expect to see in one of the antique shops along Main Street more than in a modern factory.

Mrs. Burk works at the House of Windsor Inc., a cigar-manufacturing company perched on the edge of rolling farmland just outside Yoe, which is east of York, Pa. Although the stripping machine she operates has remained unchanged for 50 years, the industry has undergone a dramatic transformation.

"Cigar production was big in Red Lion and Yoe, real big," said Walter T. Allen, a former president of House of Windsor.

Once there were hundreds of cigar companies in this region of central York County -- including some big, five-story factories with more than 1,000 workers and many mom-and-pop operations on the top floors of two-story garages -- but only two remain.

"It's us and G. W. Van Slyke & Horton in Red Lion," said Brian Hershner, a vice president of House of Windsor. "Oh, there's the Brogue Cigar Co., but the guy there has closed the plant [about six years ago], and he has us make his cigars for him."

"At one time, back in the 1920s, about 20 percent of all the cigars in the country were made in this area," Mr. Hershner said. Today, he estimated, the region accounts for 2 percent.

The House of Windsor produces mid-priced (55 cents to 60 cents) cigars sold under the brand names House of Windsor, Mark IV, Wolf Brothers and Caribbean, along with lines of pipe tobacco and chewing tobacco. It has about 100 workers, half as many as it had 10 years ago. It identifies itself as the fifth or sixth largest cigar making company in the country.

G. W. Van Slyke & Horton Inc. in nearby Red Lion has 20 workers making its Canadian Club, El Reeso Sweet and Spanish Maid Crooks cigar brands.

Industry people attribute the long, steady decline in the region's cigar industry to a variety of factors, not the least of which is wives who object to their husbands' lighting up in the living room.

"The non-smokers are winning the battle," Mr. Allen said.

But the industry's problems date back to when cigarettes were considered suave. Mr. Hershner said cigar sales began declining in the 1930s as cigarettes grew in popularity.

Automation also took its toll. The introduction of cigar-making machines in the 1930s helped companies that could afford them, but it put an end to the many small shops that couldn't.

The emergence of supermarket and drugstore chains in the 1950s and 1960s, with their practice of charging a slotting allowance "hurt the industry a lot," Mr. Hershner said. A slotting allowance is payment to a store owner to display a product. It favored the bigger companies that could afford the fee.

"These are all factors," Mr. Allen said, "but the main reason is the decline in consumption." He explained that cigar companies are struggling to grab a bigger slice of the pie, which keeps shrinking.

Norman Sharp, president of the Cigar Association of America, said sales have declined steadily since 1964, when 9.6 billion cigars were shipped. Last year, sales were down to 2.2 billion.

There were more than 15,000 factories in the 1920s, but only about 50 today.

Mr. Allen, who retired from the House of Windsor in 1977, said it once was owned by the United States Tobacco Co. "But when it reached the point that it was not making a profit any more, the board of directors of United States Tobacco said, 'If it's not making money spin it off.' " It sold House of Windsor in 1988.

The current owner is John Woltman, a 40-year-old York County native who started working for the company as a stock boy in 1970. The word through the industry grapevine is that the House of Windsor still is struggling.

A recent catalog distributed by J. R. Tobacco Co. in Selma, N.C., included a plea for customers to buy House of Windsor's Caribbean cigars to help keep that company from shutting down and putting its employees out of work.

"Our financial picture is not real rosy," said Mr. Hershner, the vice president, "but it's not that bleak."

Mr. Hershner said sales were $14 million to $15 million last year and have been declining slightly less than the industry average of 5 percent in recent years.

Mr. Woltman, the owner, conceded that House of Windsor was in the red last year, but he declined to say how big a deficit it posted.

He brushed aside any suggestion that his company would go the way of the good 5-cent cigar. "I think the industry as a whole will eventually stabilize," he said.

Mr. Woltman expressed confidence the industry's contraction is about over and that House of Windsor will carry on.

Joe Jacobs, who recently became president of G. W. Van Slyke & Horton, which his father started 50 years ago, was not as certain. "Times are tough," he said of the company, which shipped 10 million cigars last year. "We would like to think we will be around in another 10 years, but I'm not sure that's being realistic."

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