Israeli Teva workers strike over wage gaps after CEO halts cuts there

Teva Pharmaceutical CEO Jeremy Levin

Workers at a Teva Pharmaceutical Industries plant that makes the API for the company's blockbuster Copaxone have walked out, saying they are paid far less than workers at some other Teva plants. The strike Sunday, however, didn't come until after the company ($TEVA) last week said it would reconsider whacking 700 to 800 production jobs in Israel as part of its global cost reduction plans.

The 1,100 workers at the plant at Neot Hovav in Southern Israel went on strike Sunday because they earn roughly a third of what workers in the central part of the country make, Avraham Zohar, chairman of the plant's workers committee, told Globes. Zohar claims workers at the plant in Neot Hovav make an average salary of NIS 4,500 ($1,270) while workers at plants in central Israel earn NIS 13,000 ($3,672). About 60% of the workers at Neot Hovav are paid minimum wage even when they work weekends and holidays, he told the business publication.

Teva has offered production workers at all of its plants in Israel a 5% pay hike over 5 years, Zohar told Globes, but did nothing to address the pay discrepancies. That means workers in central Israel will get NIS 3,000 under the agreement, while employees in other areas will get just NIS 400. "We won't lend a hand to the perpetuation of these differentials at the company. We cannot survive another year on these salaries," Zohar said.

The company has not commented on the strike, according to Haaretz, which says the plant produces the API for Copaxone. The drug is Teva's best seller, but after a U.S. court invalidated a key patent on the drug in July, it faces generic competition next May instead of November 2015. That is one reason Teva CEO Jeremy Levin is expediting cost reductions. He intends to remove $2 billion in costs, most of it by the end of next year. The majority of those cuts are expected to come from streamlining production and supply chain operations.

The drugmaker last week backed off the 700 to 800 jobs cuts in Israel after Teva unions threatened to strike over the proposed job losses. Union leaders said they understood the financial situation and would work with the company. Politicians also pointed to the tax incentives the company has received, saying it now owes Israel the jobs in exchange.

- read the Globes story
- here's more from Haaretz (sub. req.)

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