Israel’s leadership has a solution for reducing the number of local Teva employees set to lose their jobs: Close plants in Ireland instead.
Tuesday, Prime Minister Benjamin Netanyahu, along with Israel’s ministers of finance, welfare and labor, and economy and industry, were set to meet with Teva helmsman Kåre Schultz to demand he reduce the 1,750 job cut tally he’s queued up for the drugmaker's home country.
As part of that effort, the officials are angling to save two Jerusalem-based plants currently slated for closure, according to Israeli newspaper Globes. And one way to do that, they figure, is to urge Teva to stop or scale down its pill manufacturing in Ireland.
While production in Ireland “may be $10 million cheaper for Teva” than production in Israel, “that's not such a dramatic number for a company like Teva that it can't absorb it, for all the deep crisis it finds itself in,” one senior government source told Globes. “In Ireland, Teva is not a symbol, but in Israel it is a symbol, as shown by the fact that the whole country has been up in arms for days and the prime minister is dealing with the matter personally.”
As another of Globes’ government sources put it, Israel is "entitled to expect a different approach from the Teva management given the huge benefits the company has received from the state over the years.” Those benefits include $6.3 billion in tax breaks since 2006, Bloomberg notes.
Teva caught fire for its job cutting plans in its home country even before the company officially rolled out its plans for 14,000 global layoffs last Thursday. With the company struggling under a mountain of debt at a time when generics pricing pressure is hitting hard, Teva made no secret of the fact that it needed a restructuring to get back on track.
With that in mind, Knesset Labor Party chairman Avi Gabbay criticized the Israeli government for not getting involved sooner.
"Teva's management makes risky deals and its board of directors behaves like the House of Lords,” he said, as quoted by Globes. “The government of Israel has known for five months that this was coming, but where were they? ... When these things are done after the fact, it's very hard to fix anything."