Tuesday, August 17, 2010

Merck's Cherokee Plant Reaquisition "Curveball": Some Decoding Underway, At Fierce Pharma

FiercePharma is now amplifying the themes in a story I wrote about over a week ago -- on the reacquisition of the Cherokee Pharma Riverside API facility. This bit below is slightly mis-stated, though -- all New Merck has actually said is that it will keep the union workers employed while it decides what to do with the plant it sold only two-and-a-half years ago, now -- do go read it all:

. . . .That makes it all the more puzzling how Merck will keep on the payroll all 454 Riverside workers, as it says it will. But it's a good thing, especially for those at mid-career and beyond. . . .

On average, each member of the unionized Riverside workforce has 16 years of experience and seniority (read as: expensive). So, I think it likely that Merck will ultimately slowly stage this ingredient production to another non-union facility, drastically cut-back on the union workers' benefits (as these USW members are presently working without a contract), or both. There is not a whole lot else -- in my experience -- that would be gained from ending this previously "out-sourced"" way of meeting Merck's diverse-owned supplier spend initiatives. It must mean New Merck doesn't intend to fill these supplies from a historically-disadvantaged or diverse source any longer, and the likely reason it would do that would be if it were ultimately going to source them elsewhere (internally), in my opinion.

No comments: