Articles, Blog

Strike Over Teva Firings Shuts Israel Bourse, Banks, Airport

Strike Over Teva Firings Shuts Israel Bourse, Banks, Airport


Strike Over Teva Firings Shuts Israel Bourse, Banks, Airport Teva workers protesting near facilities around the country tied up morning rush-hour traffic on Sunday. The walkout called by the Histadrut labor federation lasted until noon, in response to management’s announcement on Thursday that it would cut 1,700 jobs and shut down two plants in the country. The firings are part of a bigger plan to slash 14,000 jobs worldwide as Petah Tikva, Israel-based Teva seeks to whittle down a debt pile more than twice its market capitalization. Prime Minister Benjamin Netanyahu told members of his cabinet he would use several “tools at our disposal” to prevent the closure of a Teva manufacturing plant in Jerusalem and try to “limit damage” for the company’s employees, according to a text message from his office. Teva has been struggling since it paid almost $41 billion last year to acquire Allergan Plc’s generics unit, a deal that failed to yield the anticipated sales boost. Compounding the problem is the loss of its monopoly on Copaxone, the multiple sclerosis injection that at one point generated half of Teva’s profits. Hundreds of Teva employees blocked central roads in Jerusalem and chanted slogans as they marched to the Netanyahu’s office as cabinet members arrived for their weekly meeting, police said. The government is considering a grant to Teva that would enable the company to reduce the number of jobs cut in Israel, the Haaretz newspaper said, without saying how it got the information. “Our factory is bleeding and the situation is bleak,” Teva union leader Itzik Ben-Simon told Israel Radio. The company, whose expenses will total $16.1 billion this year, said most of the cost reduction will take place in 2018. Teva will also record a restructuring charge of at least $700 million. Teva shares rose as much as 2.7 percent Sunday after jumping 13 percent Dec. 14 when newly installed Chief Executive Kare Schultz outlined the restructuring plan. Its American depositary receipts in New York rose 10 percent and added 8 percent the following day. Schultz said his top priority is to bring Teva’s leverage below 4 times Ebitda, or earnings before interest, taxes, depreciation and amortization, by the end of 2020. The ratio was 4.7 last quarter. The proposals include paying down $4 billion of bank loans within a “relatively short” period, he said. Schultz, who was offered $40 million in cash and stock to take over the company in November, swiftly instituted a management shakeup and announced plans to reorganize Teva’s generic and branded drug businesses into a single, streamlined entity.

Tagged , , , , , , , , , , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *