Hospira whacks first 100 jobs as it shutters Clayton, NC, plant

Just weeks before announcing that it was selling itself to Pfizer ($PFE) for $15 billion, Hospira ($HSP) said it had decided to close up its once-troubled plant in Clayton, NC, and lay off the 250 workers in June. Those job cuts have now begun.

F. Michael Ball

The Lake Forest, IL-based drugmaker issued a WARN statement with the state for 100 of the positions, the Triangle Business Journal reports. Hospira explained in January that the four products made at the plant could be transferred to other manufacturing facilities, or contractors. The drugmaker took a $45 million charge for the closing that included about $15 million for severance for the workers. That compares to the $80 million that CEO F. Michael Ball may get if he loses his job as a result of the Pfizer buyout.

Hospira bought the 100,000-square-foot Clayton facility from Fresenius Kabi in 2004 and then invested about $15 million to expand the operation. But quality problems plagued the sterile injectable facility and Hospira's much larger North Carolina plant in Rocky Mount. In 2010, both were listed in a warning letter laying out a number of problems. The plants ran at reduced capacity and some key products had to be taken offline, which resulted in drug shortages for the market to bear and revenue hits for the drug company.

Ball remade his quality management team, and the company laid out more than $375 million on consultants and upgrades. In 2013, the Clayton facility passed a reinspection with no observations, while the Rocky Mount facility was given a Form 483 with 20 observations the FDA wanted dealt with. It has taken another two years, but the company's efforts have finally paid off.

In the company's earnings call about a week ago, Ball announced that the FDA had told the company that it was lifting the warning letter for Rocky Mount and for the soon-to-be-closed plant in Clayton.

- here's the Triangle Business Journal story