Friday, June 02, 2006

Schering-Plough Eliminates 500 New Jersey Jobs

From the Star Ledger:

Pharma firm axes 500 jobs in N.J.

Schering-Plough yesterday eliminated the jobs of 1,100 manufacturing workers -- including 500 full-time employees in New Jersey -- in the single largest job cut by the drugmaker in recent years.

The Kenilworth company cast away about 3 percent of its workforce by cutting jobs in Union and Kenilworth and at two sites in Puerto Rico, at an expected savings of $100 million annually beginning next year.

The job reductions, effective immediately in New Jersey, follow a pattern of belt-tightening in the Garden State's pharmaceutical industry. They also come at a time of high profits on strong sales of the cholesterol drugs Vytorin and Zetia and the rheumatoid arthritis treatment Remicade, which Schering-Plough markets overseas.

"Schering-Plough had 32,600 employees worldwide before yesterday's layoffs. It will now have about 7,000 workers in the Garden State, where the company makes the Asmanex asthma drug, the Nasonex allergy medicine and an over-the-counter Claritin pill."

"'It's more of a shift, putting their people where they are needed,' Philip Kirschner, president of the New Jersey Business and Industry Association, said of the layoffs. 'They need to create blockbuster drugs, which will create a need for more manufacturing jobs at some point.'"

26 Comments:

Blogger grim said...

Schering to cut 500 N.J. jobs

With the news, Schering joined a growing list of big pharmaceutical companies with operations in New Jersey that have announced layoffs in recent months.

Last November, Whitehouse Station-based Merck said it would slash 7,000 jobs and close several plants as part of a broad restructuring plan intended to save billions over the next four years. New York-based Pfizer Inc., New Brunswick-based Johnson & Johnson and Madison-based Wyeth have also recently announced job cuts.

6/02/2006 06:12:00 AM  
Blogger bairen said...

I expect to see this more and more. The cost of living is too high in NJ. Companies can open new plants in other states at a lower cost for both the buildings and the employees.

I wonder if the pharmaceutical companies will follow the car manufacturers and close their NJ plants. Seems like anytime a new car plant is opened in the US its somewhere in the south.

6/02/2006 06:14:00 AM  
Blogger grim said...

News like this frustrates me incredibly. The future of the state is slowly slipping away, but because of years of fiscal irresponsibility, the state is powerless to try to stop it.

One-time readers email me telling me that I'm only posting the negative, and ignoring the positive. To tell you the truth, I'm having a hard time finding anything positive relating to the NJ job market.

Take this piece for example, from the Herald/Record yesterday:

Made in N.J. -- still

Manufacturing is just about dead in New Jersey, right?

Not at the Wayne Machine and Die Co.

While everyone from silk makers to cracker packers may have fled to low-wage Mexico or China, company president Joseph Scuralli has no plans to abandon the Garden State.
...
The firm is one of nearly 1,000 that have kept their manufacturing businesses in the area, despite the lure of cheap labor abroad.
...
And it doesn't bother him that the state Department of Labor predicts that by 2012, Passaic County will have lost almost 5,000 of its remaining 24,000 manufacturing jobs.
...
The company's 10 machinists make between $16 and $22 per hour, including health benefits, according to Scuralli. They make custom-built machines for the production of items like plastic bags, plastic lawn furniture and even telephones.


I don't quite get it, we're supposed to be excited about 10 machinists that make $16-$22 an hour?

Those aren't quality manufacturing jobs. Hell, can you even afford to live in New Jersey at $16 an hour?

Caveat Emptor,
Grim

6/02/2006 06:24:00 AM  
Anonymous Anonymous said...

High paying jobs evaporating from NJ.

Flat incomes last 5 years soaring property taxes soaring gas cost soaring utility cost does not = soaring home prices.
We all know taxes are not going down, energy & utilities unlikely to go down much and incomes aren't going to rise much due to foreign competition.

The only thing to give NOW is RIPOFF HOME PRICES.
Anyday Now Anyday.

HOUSING PRICE BUST!

Starve realtors starve. You deserve it after abusing buyers for years.

Payback time.

Booooooooyaaaaaaaa

Bob

6/02/2006 07:05:00 AM  
Blogger bairen said...

I love Booooooooooyaaaaa Bob.
It's like watching Conan O'Brien. You know he's going to play with his hair and make fun of his show, but it always makes me laugh.

6/02/2006 07:13:00 AM  
Blogger bairen said...

I would think $16-$22 per hour is probably not even what a machinst would make in flyover country. Maybe he has a bunch of oldtimers working for him who bought their houses back in the 70's when you could get a decent house for 50k. Or they could just be clueless about what their skills could earn them in lower cost of living states.

6/02/2006 07:18:00 AM  
Anonymous Anonymous said...

Thanks Bairen.

Appreciate your posts. Keep'em coming. You seem to have a real handle on real estate.

BOYCOTT PONZI SCHEME HOUSES

Bob

6/02/2006 07:26:00 AM  
Anonymous Anonymous said...

http://www.washingtonpost.com/wp-dyn/content/article/2006/06/01/AR2006060101969_pf.html

The BIG HOUSING PONZI SCAM HAS BEEN EXPOSED

Housing Price BUST!

Boooooooyaaaaaaa

Bob

6/02/2006 08:09:00 AM  
Anonymous Anonymous said...

Some pharmaceuticals, in particular the smaller specialties, are actually increasing the number of smaller operations inside city limits, like Phila, Balt, etc., but keeping down costs by leasing space within the supply chain, for example next door to their packager.

This way, they can also hire experienced workers willing to work for less.

Can you imagine how many cheap, experienced chemical engineers are now located in "little India" in Northeast Philly?

These are the companies I'd look for if checking pharms.

Not the biggies that are simply ditching NY/NJ to head elsewhere.

Pat

6/02/2006 08:18:00 AM  
Blogger delford said...

grim: I have been trying to tell people in my area in NJ this for years. Although I have lived in NJ for many years, I am not originally from there, also I work in NYC, so I believe I have a wider perspective on things.

I have found that if you are born raised and work in NJ, the view is extremely narrow, many of these people that I know, have encountered, etc. believe all is well, and that business will and are all over NJ, because of our educated work force, proximity to NY etc. it is the same monotone litany over and over, when you try to expand on those items, they do not have a clue. Alll they can do is repeat,if you try to have an intelligent discusiion, their eyes glaze over, and the topic quickly changes.

Just wait until so many find out that all the school construction referendums they approved over the last year because they thought they were getting money from the state is not going to happen.

These middle to upper middle class towns are not going to get the funds, because the state simply does not have the money.

Many call me doom and gloom, but what can I say, I just cannot ignore all that is happening on the local level, not to mention the national level. Believe me sometimes I would love to live in la la land, and follow the crowd, it is so much easier,and when you do not have to think, it does not hurt you head. So I will take my doom nd gloom handle, better that than the way so many NJ people act , play the fiddle while the state burns, oh and the housing market drops, all at the same time.

6/02/2006 08:26:00 AM  
Anonymous Anonymous said...

I'm not surprised. The grapevine was buzzing about layoffs for a while. Methinks this isn't the end of the line.

And as someone said, the drug industry isn't as much disappearing as it is changing shape. Big Pharma is dying, but all their castoffs are working for speciality pharmas and biotechs down the street, who make thier money by...licensing products to big pharma. Tell me if that makes any sense to you.

6/02/2006 09:35:00 AM  
Blogger chicagofinance said...

Outsourcing R&D? It is a reasonable step.

Likely reduces stock price volatility and potential defective product litigation.

6/02/2006 09:52:00 AM  
Anonymous Anonymous said...

http://www.taxfoundation.org/research/show/78.html

One would imagine jobs migrating from the bottom 10 to the top 10 on that list somewhat like electrons migrate from anode to cathode...

6/02/2006 09:57:00 AM  
Anonymous Anonymous said...

chicagofinance: I agree partially. Outsourcing R&D does make sense from a stock perspective becasue it makes R&D costs look pretty. But it doesn't help from a liability perspective. Most of the big liability comes from the late-stage clinical trials...and Big Pharma usually is responsible for the tab for that.

(FYI: Biotech/Pharma is my line of work, so I know where a lot of the bodies are buried, so to speak.)

6/02/2006 10:10:00 AM  
Anonymous Anonymous said...

Unless the little guy gets a partner university with just a by-line on the trials.

Going that way.

Pat

6/02/2006 10:22:00 AM  
Blogger pesche22 said...

as i said the other day in a post.
nj is just not business friendly
and its showing.

why in the world would a company
have most of their ops. here.

its just to expensive to do business and housing is killing
many of them.

its a quality of life thing.

when is the last time a hqts. was
relocated to NJ.

6/02/2006 10:40:00 AM  
Anonymous Anonymous said...

What about Celgene? They are in Summit, NJ and they are a growing company and adding decent jobs.

6/02/2006 06:22:00 PM  
Blogger chicagofinance said...

Anon 11:10AM
(FYI: Biotech/Pharma is my line of work, so I know where a lot of the bodies are buried, so to speak.)



Would love to pick your brain!
Everyone in your macro-sector is really taking a beating. I've decided to start looking at some European firms and also generics.

No one seems to have a good pipeline or growth prospects.

However, you are being punished enough. If too many are holding their noses, I smell opportunity.

chicago

6/02/2006 11:54:00 PM  
Anonymous Anonymous said...

chicago:
Not all taking a beating.

Think smaller.

Watch the grant funding schedules, then time it.

Pat

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Anonymous Anonymous said...

barien and grim don't have a clue. Do you really think workers can get paid more and the product be competitive when it gets to market? What manufacturing plants have barien and grim run? There is affordable housing in many working class areas of NJ and yes, some is rental. People need jobs at that level too. Not everybody wants to live out in the sticks where cars, food and plenty of other things cost the same.

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