Merck Will Close Three New Jersey Facilities
19 CommentsBy Ed Silverman // April 27th, 2010 // 2:51 pm
Hardly surprising in the wake of the big merger last year (or was it an acquisition?). The drugmaker is about to consolidate office space and operations in New Jersey - Roseland, Union and Lafayette. A Merck spokeswoman confirms the changes soon to take place: the Roseland and Lafayette sites will close in 2010, while the Union facility will phase out by the end of 2012.
Meetings were held this morning with employees, although there was no specific info available on the number of people who are expected to lose their jobs. However, the layoffs will include a mix of people who work in R&D - such as in Lafayette, where Schering-Plough Research Institute has offices - as well as manufacturing, among other things. There is some irony here - as one source notes, Merck is laying off some of the scientists who helped create the pipeline they so greatly coveted.
Condor
Great scoop here, Ed!
I will let the assembled multitude here know that when I mentioned Ed’s, on my blog — an anonymous commenter promptly informed me that employee-generated rumor has it that there will be a union-organized strike at Merck’s West Point facility — when the current collective bargaining agreement, or “union contract“, in plain English, expires on May 1, 2010. That’s Friday, by the way.
The law of unintended consequences, no?
नमस्ते
pharmavet
Two comments:
1) Any strike in the pharmaceutical industry is doomed to failure since the industry is heavily NON-unionized, and any strike will collapse under the weight of pressure from both the non-union employees and management. Also there are so many plant workers recently laid off that any picket lines will be readily crossed, whether they be by union or non-union workers. This isn’t the UAW. Most likely the unionized pharma workers have little idea on how to organize and maintain a strike. I would also guess that since this effort has not been organized for very long that there are little or no union financial reserves to pay the striking workers after they have been fired, which most assuredly would be the outcome.
2) The Roseland closing is no surprise since that was Organon HQ prior to S-P buyout.
pharmavet
Two comments:
1) Any strike in the pharmaceutical industry is doomed to failure since the industry is heavily NON-unionized, and any strike will collapse under the weight of pressure from both the non-union employees and management. Also there are so many plant workers recently laid off that any picket lines will be readily crossed, whether they be by union or non-union workers. This isn’t the UAW. Most likely the unionized pharma workers have little idea on how to organize and maintain a strike. I would also guess that since this effort has not been organized for very long that there are little or no union financial reserves to pay the striking workers after they have been fired, which most assuredly would be the outcome.
2) The Roseland closing is no surprise since that was Organon HQ prior to S-P buyout.
Condor
PharmaVet — maybe a small point, but Merck cannot simply “fire” striking union laborers, especially if the reason they go out on strike is an allegedly “unfair labor practice“, as defined in the NLRA of 1935, or rules promulgated under it (as opposed to a simple economic strike — for higher wages). As ever, we shall see.
As to your conjecture on the number of union employees at New Merck, I think your information is out of date, or you have miscalculated:
“. . . .As of December 31, 2009, the Company had approximately 100,000 employees worldwide, with approximately 42,000 employed in the United States, including Puerto Rico. Approximately 28% of worldwide employees of the Company are represented by various collective bargaining groups. . . .”
That’s from the bottom of page 21 of Merck’s SEC Form 10-K filed a few weeks ago.
I think the concern would be that any strike involving some 28,000 employees in total (should a sympathy, or tertiary strike erupt) would be a real problem for New Merck’s image as a progressive, responsible company.
I think Merck will likely agree to settle, and sign a new collective bargaining agreement with the union at West Point, PA — and soon.
नमस्ते
leahcim
Condor,
May 1st is Saturday.
Condor
Thanks, leahcim!
Quite so. A Saturday’s as good a day as any, for a walkout — as I supsect Merck does run seven day production schedules at West Point, PA. We’ll see.
नमस्ते
pharmavet
Remember that 90-95% of all medicines that patients take for the common ailments are generic. Before assessing the impact of any strike on patient health, I’d like to know which are the plants and which are the products involved. This is much different from the Genzyme situation where a plant shutdown actually jeapordized patient health.
If it turned out to be a global strike Merck would indeed move to settle quickly, but only in Europe, where the strength of the unions is much greater than the US. In the U.S. Merck doesn’t have to fire anybody. After the union workers go without a few paychecks they will return to work posthaste. There is no such entity as “The International Pharmaceutical Workers Union”, so that the US workers are basically on their own.
More specifically, what are the “Unfair Labor Practices” that would be the grounds for a strike or lawsuit against Merck? Simple downsizing isn’t one of them since Merck is a publically held company whose primary fiduciary responsibility is to the shareholders, and downsizing is part of exercising that responsibility.
As Merck and other pharma companies gradually move the plants to developing countries these issues will be less pressing. In fact, any union moves like a strike are only likely to accelerate this trend.
Hopingtostayemployed
Well, no Merck legacy site closures announced? Guess no surprise there…talk is that it will be the Merck way from now on. Goodbye legacy Schering. Too bad, since the success of Schering post consent degree is the reason they looked so appealing to buy. Seems Merck bought the product pipeline and the employees, well, guess they can add to the growing unemployment in NJ. This announcement comes days after CEO of Merck’s compensation was revealed…hmmm..11 million plus, and how many people will be losing their jobs to finance that? Trend of pharmaceuticals today is merge and purge.
pharmavet
These are the terms of the expiring union contract. Pretty sweet deal if you ask me. They can’t possibly hope to top that one. Even Pharma CEO’s have had their bonuses reduced or eliminated the past few years. Even ratifying the current contract (with another sign-on bonus) would put these workers ahead of most US hourly workers.
http://pittsburgh.dbusinessnews.com/shownews.php?newsid=117023&type_news=latest
pharmavet
Interestingly, Merck has a long history of labor unrest. History has also proven that Merck is not averse to bringing in non-union workers in these types of situations when continuing operations are threatened.
http://www.nytimes.com/1984/09/15/nyregion/workers-at-merck-vote-to-end-strike.html
http://www.themilitant.com/2009/7313/731332.html
http://www.apmhealtheurope.com/story.php?numero=L8854
http://www.mycentraljersey.com/article/20090316/NEWS/903160370/Union-workers-protest-layoff-plans-at-Merck-facility-in-Rahway
http://www.usw.org/media_center/releases_advisories?id=0138
http://www.secinfo.com/dsvr4.bJx.htm
http://www.secinfo.com/dsvr4.bJx.htm
captpel
merck sucks
pharmavet
Golly, Captel, please tell us how you really feel?
Todd
Here’s the deal on West Point. It’s a HUGE manufacturing hub for Merck in the US, especially for viruses. The union representing them is a local of the United Steel Workers. http://www.usw10-86.org/ As to the impact, I’m not sure. It is heavily dependent on the inventory Merck has to dish out. Anyone trying to predict this strike is a fool. We’ll see how this all shakes out.
M. Black
Ironic about laying off the pioneers? Or just plain basrardly?
MB
pharmavet
The United Steel Workers has even less clout than the UAW inasmuch as most of our steel is imported these days. Unless of course you consider the USW’s solidarity tee shirts as a show of strength.
Former Merck
I wonder if this was Frazier’s idea? Pity the poor suckers that still work for this poor excuse of a company. Their golden era is long gone.
Condor
Updated USW Local No. 10-86 contract talks status letter, as of 10 a.m., on May 1, 2010. Pretty strident rhetoric in that letter. Do take a look.
Next likely strike date: May 8, 2010.
नमस्ते
Condor
In the event that any current talks result in a proposed contract by tomorrow afternoon, USW Local No. 10-86 has tentatively scheduled a ratification vote, with its membership, for Tuesday night, the 4th, at 6 PM EDT.
That is a very tentative schedule, however, as no agreement yet exists on a proposed contract, and it would seem that the sides were fairly far apart as recently as Saturday morning. I’ll keep you posted.
नमस्ते
Condor
BREAKING! — West Point, PA: Union Strike Against Merck Likely Averted At 11th Hour. . . .
A ratification vote is now scheduled for Wednesday evening. On balance, this is good news for the affected families. The one-week grace period was set to expire this morning. Even so, these very-capable people, up and down the line at Merck’s West Point, PA facility, have been working without a contract since last Friday night. Some details, then:
. . . .Late Friday night, and after months of intense negotiations, USW Local 10-00086 and Merck reached a tentative settlement on a new 3-year agreement that would run through April 30, 2013.
As we have recently reported, our negotiations grew increasingly difficult as the process dragged on. As much as we argued, as hard as we fought to save West Point jobs, the Company simply refused to listen to our message that Merck’s USW employees –- many of whom have dedicated their working lives to the success of the West Point site — are better suited to secure and maintain the West Point facility than $10/hour day laborers. At the end of the day, however, the Committee was able to conclude our negotiations at a point where we could protect all of our people if not their current jobs.
There are a number of provisions in the new, tentative agreement. Many are significant improvements. Some are not. But considered as a whole, we believe that the tentative settlement is worthy of consideration by our full membership. . . .
Do go read the rest of it, at my site.
नमस्ते, to all of good will.