Sanofi, France remain at odds over fate of 600 R&D jobs

Sanofi CEO Chris Viehbacher has reviled the company's research site in Toulouse, France, as unproductive and overly costly. But try as he may, he can't seem to rid himself and the company of the center and its 612 researchers, a move Viehbacher initially advocated as part of 2,500 job reduction plan in the mother country.

Sanofi ($SNY) today said it will leave the facility open for up to 5 years as it works with the government to turn it into a self-supporting research center. Sanofi and the government, however, are still bickering about how much support that will mean. Bloomberg said France's Industry Minister Arnaud Montebourg proclaimed Sanofi bought into recommendations of a state-sponsored report and will keep 500 employees there.

Sanofi spokesman Jean-Marc Podvin, however, said not so fast. He claimed Sanofi would use the report, which recommends Sanofi continue drug research there, as a roadmap to work with labor unions but was making no promises as to how many jobs it will keep. He said Sanofi will look at options like creating a technology platform there that could support itself and other startups.

The center was targeted last year as part of a downsizing in the country that first was slated to eliminate up to 2,500 jobs but ended up with just 900 on the chopping block and uncertainty around the 600 or so in Toulouse. Viehbacher has been insistent that Sanofi has to reorganize its R&D, which he says costs more than competitors' and takes 20% longer to turn out new drugs.

French labor laws and the French resistance to the cuts have complicated the moves. While drugmakers lay off workers by the thousands in the U.S. and elsewhere, in France, Sanofi was faced with employee protests, political arm-twisting and public ridicule. Unemployment in the country tops 10%, and the kinds of high-tech jobs that the research center has are highly prized. "In France, the politics, the labor laws are extremely different than in other regions," Elias Zerhouni, who leads R&D for Sanofi, told The Wall Street Journal last month. "It means that for sites like Toulouse … anything you want to do differently gets to be a confrontational issue."

- read the Bloomberg story

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