Is Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) “a ticking bomb” after new Danish CEO Kare Schultz has ordered a quarter of the Israeli pharma giant’s workforce to walk out the struggling company’s doors? For Schultz, what was a strategic bid to save the company has translated to its dedicated employees as a cutthroat move they are not willing to accept without a fight.
Investors may have initially liked Schultz’s restructuring game plan to salvage funds for a company sinking in debt, but for 14,000 Teva employees across the world, and 1,700 housed in Israel, livelihoods are at stake here, and cries of bringing “the failed management of Teva to justice” are now being heard through the streets. Shares are slipping 3% in trading today.
The workers union at the Teva tablets factory in Jerusalem, Israel has a dangerous “stockpile of explosive and poisonous materials – the whole country should be on alert,” Chairman Itzik Ben Simon warned to Hadashot news. Should Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon choose to close down the Jerusalem factory of the world’s largest generic drugmaker, Simon cautions: “we will cross red lines.” With Teva factory workers protesting to blow up the factory, the Chairman cannot help wondering if the risk of losing roughly $220 million in the wreckage is worth it simply to “try to save NIS 20 million.”
Simon simply makes one “demand” of the Israel’s finance minister: “that he lets Teva in Jerusalem keep working forever.” The protesting Teva employees will not accept less than this request, and for the national trade union of Israel, “the message that will be given to the prime minister is: our factory will remain.”
As far as Simon is concerned, “We are a profitable company with good results over the years and therefore I think, am sure and believe that the factory will remain.”
Avi Nissenkorn, chairman of the Histadrut labor federation believes that in order to protect “local industry” this kind of “saving” first and foremost “must begin with protection of workplaces,” adding: “The government and the Teva administration have the responsibility to bring an end to this crisis. Firings are a last resort, and all the relevant bodies must join together in order to minimize the impact on workers and to ensure that Teva, with all its factories, remains in Israel.”
Just yesterday, 200 workers locked themselves in the factory until morning, refusing to let managers leave the premises as even family members contributed with fire and ire, burning tires beyond the factory walls. Protest rallies made their way through Jerusalem, Ashdod, Netanya, and Petah Tikva on Sunday, with police officers forced to remove objectors from blocking the highway. Tires were on fire in Ashdod with protestors shaking up Petah Tikva’s traffic. Banks, post offices, government offices, the Tel Aviv Stock Exchange, and more- even Israel’s Parliament (the Knesset) were left unable to function as the most colossal strike in years moved like a vicious tidal wave through the country; all fueled by the loud anger of Teva employees. Next move is Schultz’s, but for a CEO who stands by the need to restructure Teva in a drastically monumental way, all eyes remain on Teva to see what plays out next.