Plants Are People, Too

I had a pretty good angle for the original draft of this editorial. As part of my work on our annual Top Companies issue, I have to read a lot of annual reports and SEC filings. There’s a wealth of information to be found in these documents, of course. At times it takes some detective work to figure out the connections among various line items. I don’t pretend to know everything that’s in them, but I end up making some pretty good observations, both about what companies say and what they don’t say.

For instance, I find it fascinating that, while major pharma companies will passingly refer to “some third party suppliers” in the manufacturing segments of their 10-K statements, small biopharmas tend to detail every CMO with whom they work.

It’s that question of what’s “material” to the shareholders, and contract services don’t top the list for companies with enormous manufacturing networks. Of course, those giant networks come with their own set of costs, and they’re quite material to the shareholders.

Reading all those reports this year, I was struck by the number of major companies that are avowedly “rationalizing” their manufacturing and R&D networks (after having fired tons of salespeople). My original premise for this column was to run a mix-and-match of companies and the names of their restructuring programs. I don’t have a theory yet as to why some companies come up with “Project Impact,” ”Forward,” and “Plan To Win,” while others simply refer to it as their restructuring program; if any of you can offer one, I’d be glad to hear it.

Still, I thought it’d be funny to goof on that corporate-speak mentality that tries to dress up a program of plant shutdowns, lab spinoffs and massive firings with a baseball cap-worthy brand name. I also had a digression about the two NJ-based companies that had a “Productivity Transformation Initiative” and a “Productivity Transformation Program,” wondering who cribbed from whom.

Then I reflected on the interview I conducted with Tony Maddaluna, part of whose job is helping Pfizer’s manufacturing division go from 100 plants down to 43. Most of our conversation made it into the article, but there were a few passages that the company asked me not to run.

When I looked back over my original transcript and then at my spreadsheet of fancy restructuring names, I understood where they were coming from. I hadn’t thought about it before, but there’s a real problem in talking about these plans. No matter how well intentioned the plan is, nor how much you try to avoid it, you make the people sound like numbers, or components of the facility that’s being shut down, or “total savings, mainly through attrition.”

Tony took great pains to convey that it’s never easy to close a factory (and I don’t just mean because of labor laws), especially since the company is in the process of closing the one where he cut his teeth as a plant manager. Still, there’s something in the way people (with jobs) talk about this topic that can’t help but be heard as callous.

There’s no easy way to talk about firing thousands of people. (Even if you promise to start with management, Mr. Hassan.)

So no jokes from me, this time around.

Gil Roth has been the editor of Contract Pharma since its inception in 1999.