Tuesday, November 29, 2005

Merck downsizing

In the Pipeline describes the imminent downsizing of Merck, a large pharmaceutical company. The Merck press release is here.
As part of the global restructuring program, the Company expects to eliminate approximately 7,000 positions in manufacturing and other divisions worldwide, representing about 11% of its global work force ...[snip]... also expects to close one basic research site and two preclinical development sites.
Funny how these PR's always say how they are positioning the company for 'now and in the future', they never say 'gee, stellar management bonuses in the 90's didn't incentivise decisions to make sure our company was still around in 20 years, boy, did we fuck up'.
In case your not aware, lots of pharma companys are in trouble, they have a set of wonder drugs that provide most of their income and when these patents run out, they won't be able to compete on price with the generic manufacturers. The theory is that they should have poured a bucket of money into research trying to come up with new drugs but i guess 25 years sounds a long time and hey, how hard can it be to develop a drug that does something useful?, surely it can't be as hard as deciphering my new bonuses scheme... when a research company starts to close its research centres, you know the thinking can't be that deep.
This isn't limited to just big pharma, General Motors, the world's largest car maker is also slashing jobs and has to suffer the embarasment of sending out memo's to it's employees saying they won't be filing for bankruptcy this year and having their bonds rated as 'junk' !!! They have massive legacy contracts from their unions (something like 2 retired workers supported for every current worker) and simply can't make a car as well or as cheaply as Toyota - i guess nobody mentioned that focusing on engineering, cost reduction and oh... making a better car, might just be a good idea in the long run.


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