The union representing some 500 Bayer employees in California is playing hardball with the German drugmaker. Union officials are suggesting the workers may cancel the three-year-old agreement between the two unless Bayer protects jobs from being outsourced.
Bayer conducts operations at two facilities in the San Francisco Bay Area--one in Emeryville for the blockbuster multiple sclerosis drug Betaseron--the other in Berkeley, which makes the big-selling prescription drug Kogenate for blood clotting in hemophiliacs. But last May, the drugmaker began moving the Emeryville operation back to its homeland, outsourcing to Boehringer Ingelheim.* Bayer projects 540 Emeryville layoffs from the move through 2013.
Negotiations began in July for the Berkeley workers. Officials from the local International Longshore & Warehouse Union (ILWU) are trying to protect Berkeley from the same fate as Emeryville. They want job security, an employee count high enough to ensure personnel safety and drug quality and relief from rising healthcare costs. They've turned up their noses at a 3.1% raise and "the same fixed healthcare contribution rate that has been in place since 2005," saying it's meaningless without job security, reports Pharmalot's Ed Silverman.
But $10 million in tax subsidies have been dwarfed by annual taxes paid to the region, which were $23 million last year, Bayer officials maintain, as Silverman notes. "If Bayer refuses to address the community concerns about good jobs and taxpayer subsidies, workers may notify Bayer that the current agreement will be canceled within 48 hours--opening the door for further action," the union says in a statement.
Bayer apparently made no specific employment promises when it received the tax breaks, writes Paul Thomas in PharmaManufacturing.com. But language of the deal hasn't been disclosed. Bayer says "We have a robust contingency plan that will allow us to continue our production operations," Bayer says, according to Pharmalot.
Precedent exists: In May 2010, Mallinckrodt contingency operations kept its pharma chemical plant in St. Louis operating for more weeks following a strike by 420 union workers.
* Editor's Note: The incorrect statement "despite an agreement went state and local officials for tax subsidies to keep jobs in the area" has been removed. We regret the error.