Netanyahu, Kahlon vow to limit Teva layoffs, prevent Jerusalem factory closure
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Netanyahu, Kahlon vow to limit Teva layoffs, prevent Jerusalem factory closure

CEO Kare Schultz assures PM he’s committed to keeping Teva’s global HQ in Israel, but says there is no alternative to job cuts to save the company

Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon attend the weekly cabinet meeting in Jerusalem on August 5, 2015. (Marc Israel Sellem/Flash90/Pool)
Prime Minister Benjamin Netanyahu and Finance Minister Moshe Kahlon attend the weekly cabinet meeting in Jerusalem on August 5, 2015. (Marc Israel Sellem/Flash90/Pool)

Prime Minister Benjamin Netanyahu told the head of Israel’s largest labor union Thursday evening that he will try to prevent the closure of Teva Pharmaceutical Industries Ltd’s Jerusalem factory, after the company announced it would be slashing a quarter of its global workforce including some 1,700 Israeli jobs.

Speaking with Histadrut labor federation chairman Avi Nissenkorn, Netanyahu said he would work to limit the damage to Teva employees and prevent the closure of the Jerusalem factory where the majority of the pharmaceutical company’s Israeli workforce is based.

Netanyahu said he plans to meet next week with Teva CEO Kare Schultz in order to discuss the issue, according to a readout of the conversation with Nissenkorn.

Employees of Teva Pharmaceutical Industries protest against the company’s plan to lay off 1,700 employees, in Kiryat Shmona, December 14, 2017. (Basel Awidat/Flash90)

Finance Minister Moshe Kahlon said that he too would be meeting with Schultz in order to “minimize the scope of the layoffs.”

“I expect the company, which has for many years been a symbol of Israeli international success, to a make particular effort to limit the damage to Israeli employees,” Kahlon said in a statement. “The Israeli government will use all the tools at its disposal in order to help anyone who finds himself without work.”

The Israeli drug company TEVA Pharmaceutical Industries in Jerusalem on August 6, 2017. (Yonatan Sindel/Flash90)

The company said the 1,700 layoffs in Israel would be completed by the end of 2019, according to a letter sent to Teva’s Israeli employees. The restructuring will see the closure of the Jerusalem manufacturing plant by the end of 2019 and some of the research and development activity in Israel scaled back. The company will also seek to sell off its global logistics center in Shoham and its plant in Kiryat Shmona.

In a letter to Netanyahu sent earlier Thursday, Schultz apologized in the name of the drug-maker’s management for the situation the company is facing today.

The ailing drug-maker is saddled with debt and has been suffering from price cuts in its generics business along with sooner-than-expected competition to its flagship branded drug, Copaxone, for multiple sclerosis.

Kåre Schultz, the newly appointed CEO and president of Teva. (Courtesy)

“We, the board of directors and management of the company, wish to assure you that after careful examination of the alternatives, we have no other choice — we must save Teva — and so we will do,” Schultz wrote.

“I am committed to maintaining Teva’s global headquarters in Israel, including my office. I do this as part of my commitment to Israel and with maximum confidence in the potential for our success here in the long term,” he added.

Teva’s new reorganization plan has already encountered fierce opposition from Israeli politicians, and the powerful Histadrut labor union called for a general strike throughout the country next Sunday morning in anticipation of the layoffs, as details of the plan leaked to the press over the past week.

The company received NIS 22 billion (some $6.2 billion) in Israeli tax breaks since 2006 and must therefore “honor the Israeli people who have helped it,” Nissenkorn, the national labor union chief, said on Wednesday.

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