Merck Plant Closings .. is there a Merck Plant near you ?
it appears that the US drug industry is following the example of the US auto industry, beginning with an announcement by Merck that they will be closing five major manufacturing plants plus some research/clinical study facilities in the USA and eliminating 7000 jobs.
Re: Merck Plant Closings .. is there a Merck Plant near you ?
Hmm...I wonder if the US implemented a policy that companies operating in/selling to the US must follow basic environmental/safety procedures and worker-treatement/pay policies (offering whatever is a "normal" wage in those countries) and also pay appropriate taxes on all profits earned through those US sales/imports would companies be so quick to take our jobs away?
Re: Merck Plant Closings .. is there a Merck Plant near you ?
There's about a million variables to wrestle with that concept - not the least of which is regulating compliance outside of our own country, practicing restraint of trade, denying our own consumers lower-cost goods, and running counter to trade agreements already in place with other countries.
Re: Merck Plant Closings .. is there a Merck Plant near you ?
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offering whatever is a "normal" wage in those countries
just like the auto industry, the central issues are undoubtedly highly paid unionized American workers with generous benefit packages, versus the availability of skilled overseas workers who are willing to accept 1/5th the pay rate with few benefits - plus relatively lower tax rates and lower environmental/worker safety compliance costs in foreign countries.
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I wonder if the US implemented a policy that companies operating in/selling to the US must follow basic environmental/safety procedures and worker-treatement/pay policies
OK fine, if the major drug companies cannot 'import' outsourced drugs into the USA at a profit due to the extra costs of meeting your 'new' requirements, they may just decide to avoid losing money in the US market and not import any more drugs here. After all, Chinese, Indian and 3rd world populations represent a much larger market than the US, thus a choice of complying with your 'new' requirements but being financially uncompetitive in the rest of the world markets will be a no-brainer. Of course the unintended consequence of your 'new' requirements could be that instead of drugs being plentiful, they'll simply be unavailable through official channels. This of course would be a major boon to the illegal drug importers, who would soon start bringing in cases of 'illegal' penicillin and insulin from non-compliant offshore drug plants along with their load of coke !
If this were to occur, the US gov't would have little choice but to take over the drug industry's former US production facilities and operate them itself. The US gov't has no power to force a private corporation to operate at a loss, but it could certainly operate former US Merck plants at a loss (subsidized by tax money of course). However, this approach didn't work very well for the former Soviet Union, it doesn't work for Amtrak, and it won't work very well for the closed US Merck plants either !
The irony involved with the drug industry versus the auto industry is of course that the outcry of a certain political faction to regulate/reduce drug costs in the USA probably prompted the Merck cost analysis... where these plant closings and outsourcing are a predictable 'CYA' reaction.
All of these issues aside, what this means for dancers is that by the end of next year another 7000 families will see their 'discretionary income' significantly reduced, as they are unable to find new jobs which pay anything close to the pay rates and benefit levels they received working in the drug industry. Probably at least another 7000 families who work with subsuppliers and service industries dependent on the US Merck plants will also be affected.
Re: Merck Plant Closings .. is there a Merck Plant near you ?
Eliminating 11% over 3 years is just a shade over 3.5% per year and would easily be doable with just basic productivity gains an worker attrition. The stock went down because it was not considerd to be a very deep cut.
The plant closings will also add some jobs at other MRK plants as production is shifted. the
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All of these issues aside, what this means for dancers is that by the end of next year another 7000 families will see their 'discretionary income' significantly reduced,
neglects that the target is by year-end 2008, not 2006. Targets also change with zero consequences if the company fortunes improve.