Welch Allyn to cut workforce

2012-09-11T03:05:00Z 2012-09-11T08:27:35Z Welch Allyn to cut workforceNathan Baker / The Citizen Auburn Citizen
September 11, 2012 3:05 am  • 

A global restructuring of medical supplies manufacturer Welch Allyn will result in a net job loss at the company's Skaneateles Falls headquarters of about 45 over the next three years, with no layoffs from the manufacturing floor, CEO Steve Meyer said Monday.

Meyer said the restructuring plan, which includes an estimated 10 percent cut to the company's 2,750 employees worldwide, will prepare the company for a new 2.3 percent domestic sales tax scheduled to go into effect in January as part of the Affordable Care Act enacted in March 2010.

"If you look across the industry, you will find a plethora of restructuring and workforce reductions taking place as we speak," the CEO said. "As a private company, we had the luxury of holding off as long as we could hoping that it would be rescinded, or delayed, or we would find our own internal pearls that might help us solve the challenge, but we could just not wait any longer."

As a major part of Welch Allyn's restructuring, the company's patient monitoring, systems and low acuity vital signs manufacturing operations will move from its Beaverton, Ore., facility to Skaneateles Falls. The manufacturing of thermometer probe covers, lamps and blood pressure cuffs will be relocated from Skaneateles Falls to a Tijuana, Mexico, plant.

Meyer said approximately 160 jobs will be eliminated from the Oregon location over the next three years.

"We'd like Skaneateles to be a high-tech hub, focused on our more high-tech devices, while in Tijuana we'll be focused more on our labor-intensive product lines," he said.

Meyer said the 45 local job cuts will not come from the manufacturing floor, but rather from "up and down" the other employment areas.

The cuts will be accomplished by a combination of retirements and layoffs, but Meyer said the exact ratio is not yet set.

"It's going to be a process," he said. "We have a very detailed project schedule with a bunch of work streams with multiple pieces that take place at a time so we don't disrupt business."

The company will also establish research and development centers in Beaverton, Skaneateles Falls and Singapore and plans to evaluate its European operations and reorganize its Latin American business.

Meyer said Welch Allyn plans to focus more heavily on emerging markets in Asia and elsewhere while demand for its products cools in the U.S. and western Europe.

"We've made investments and had small expansions in those markets over the last five years," he said. "Health care spending in those regions, although smaller per capita, is rising quickly as countries and governments bring up their levels of care where there was very little in the past."

New York politicians, including Republican U.S. Rep. Ann Marie Buerkle and U.S. Senate candidate Wendy Long were quick to seize on the restructuring announcement Monday, issuing statements denouncing the pending tax increases and their opponents who voted for the Affordable Care Act.

But Meyer said he and other company leadership were more concerned with the impact of the legislation than the politics behind its passing.

"We all know the history behind the Affordable Care Act," he said. "What we care about is not as much the politics, what we care about is the people. These are real decisions and real impacts. The only message we want to send to leadership is we hope they are aware of that."

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(21) Comments

  1. Farmer's Gal
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    Farmer's Gal - September 19, 2012 10:17 am
    Then we should put a tariff on those products coming into the country to make sure our home-grown products can remain competitive.
  2. Farmer's Gal
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    Farmer's Gal - September 19, 2012 10:16 am
    My ex worked there as a temp, quite some years ago -- and was told when he hired on that if he were good, he'd have a chance to get a permanent job there. For whatever other faults he may have, my ex is a really hard worker, smart, honest, talented and the kind of employee anyone would be glad to have. Then when summer came, Welch-Allyn laid off all the temps and replaced them with current employees' kids who were home for the summer and too bad on the adult temp workers with families who needed a job. Not my idea of a nice place to work.
  3. owastocat
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    owastocat - September 15, 2012 9:45 am
    Welch Allyn was a great company to work for, and the Allyn family actually cared for the employees that helped make it great. I put in over 30 years there and am deeply disappointed in the lack of leadership there now. It's too bad that the Allyn family doesn't take the reins and reverse the course of in-action and bring in some smarter "people" leaders that can make it great again. Wofgang, we miss you and your leadership!!
    This decision shows a complete lack of leadership and ideas. I have many friends and past co-workers there yet and don't want to see any of them hurt, BUT, they will be hurt none the less.
    If the leadership does not change there minds to keep the business and jobs here, then I would suggest a complete boycott of their product. If they want to be a outsourced product company, good riddance to their business.
  4. movedsouth
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    movedsouth - September 14, 2012 6:30 pm
    PSYCHIC? No, they just know what taxes are going to be imposed the first of the year. And NO 45 people are NOT going to be unemployed because of the new tax. Read the article, over a THREE YEAR period, the workforce will be reduced by layoffs AND retirements. NO ratio of each, sometimes companies offer buyouts. WE don't know if this will happen. " 45 people are unemployed because Ann Marie Buerkle needed a platform to run on!!!" You know this HOW?
  5. movedsouth
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    movedsouth - September 14, 2012 6:17 pm
    MY leg to stand on is somewhat from the Forbes article, BUT maybe you know better.
    movedsouth - September 13, 2012 9:48 am
    FORBES: "excise tax"
  6. TellYouWhat
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    TellYouWhat - September 14, 2012 11:18 am
    Does any one else find it ironic that this is all happening 6 weeks before election day? The tax hasn't even begun to take effect yet, and Welch Allyn is already claiming that it has devastating reprecussions? Are they psychic? Naw, this is just another example of how Politics and Big Business are all in bed together. 45 people are unemployed because Ann Marie Buerkle needed a platform to run on!!!
  7. Auburn Oldman
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    Auburn Oldman - September 14, 2012 8:46 am
    OK, so admittedly I'm not a genius on economics but lets do the math here. Welch Allyn is getting hit with a 2.3% excise tax. Now, isn't an excise tax usually passed on to the consumer? Yes. So a part that costs $1 will now be $1.02. A $10 part is now $10.23. A $100 part is now $102.30. And who is their consumer? Oh yeah...the BILLION DOLLAR A YEAR PROFIT HEALTH CARE INDUSTRY! Hmmm, yeah I can see why they would rather lay off all those workers and move an entire part of their production to Mexico than do something that incredibly expensive to such a poor consumer! I call shenanigans on this BS. MS, you don't have a leg to stand on my friend. This is greed plain and simple.
  8. TellYouWhat
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    TellYouWhat - September 13, 2012 8:15 pm
    I remember reading not too long ago about at $30 million expansion at Welch Allen's Skaneateles Falls facility. What was that all about? Why would a company invest $30 million dollars into a building, and then lay-off workers? I don't forsee them moving, I forsee them pulling the same crap HandHeld did. SELLING OUT to GE, HONEYWELL, or SIEMENS or one of their other competitors. Since Welch Allen is relatively small compared to the other Corporate Giants. Or perhaps they just don't have any innovative, or ground breaking technologies that will enable them become a leader in their industry and maybe the big guys aren't too afraid of Welch Allen after all...Good Luck to them...
  9. movedsouth
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    movedsouth - September 13, 2012 6:43 pm
    COMPETITION!!!! Foreign countries can produce these products for less. Keep raising prices and company either goes belly up or MOVES. Increase in US taxes is NOT the same as material cost increases.
  10. TellYouWhat
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    TellYouWhat - September 13, 2012 2:46 pm
    EXACTLY! You are 100% correct. All Welch Allen has to do is pass the cost on to the customer. It would be the same thing if the cost of the raw materials went up that they use to make the products with, they simply pass the cost on to the customers.
  11. jp
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    jp - September 13, 2012 1:48 pm
    The plan was for everyone to buy health insurance in this country right? Welch Allyn and other companies would be getting a better rate from a larger pool of money for everyone paying in to the policies. This would save more than the 2.3% they are getting taxed. This would also create more orders since people would have the coverage. The USA should also focus more on getting decent drug prices on medicines like other countries do instead of letting the drugs get marked up so high which also raises the cost of healthcare.
    If this country can police countries with weapons then they should also police the corporations in how they distribute their wealth within the companies. They could also put a stop to all of the temporary agencies who suck the money from the people worldwide.
  12. movedsouth
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    movedsouth - September 13, 2012 9:48 am
    FORBES: "excise tax"

    "My colleague Robert Book has written a compelling analysis of Obamacare’s medical-device tax, which concludes that it will destroy about 14,000 and perhaps up to 47,100 jobs. The 2.3 percent excise tax on medical devices is a savage blow to innovation. Note that this tax is on sales, not profits. It cuts into the top line, not the bottom line. If not repealed, this tax will start hitting medical-device makers on January 1, 2013.

    Another colleague, Benjamin Zycher, has come at the tax from a different angle: In an analysis that concludes that the tax will lead to a reduction in research and development by about $2 billion every year, Zycher estimates how many patients will suffer early deaths because of the throttling of innovation."
  13. Auburn Oldman
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    Auburn Oldman - September 13, 2012 8:27 am
    Time out! This is called a "sales tax" so what does that have to do with Welch Allyns bottom line? Doesn't a sales tax effect the buyer, not the maker? Taxes that are added in to our cell phone plans are paid by US not Verizon or any other phone carrier so what gives here folks? It seems to me that the people at Welch Allyn were looking to out source and downsize anyway and found a perfect scapgoat in President Obama. These crooks should be ashamed of themselves!
  14. rightisright
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    rightisright - September 12, 2012 7:05 pm
    If all the Obama lovers thought that the tax increases and penelties built into the ACA would have no repercussions you truely had your head in the clouds. I know many people from the plant, at all pay levels. This was not an easy or quick choice. If you do believe that they should have cut pay from the top down, maybe you should talk to the ccurrent administation in the whitehouse and have them cut THEIR pay. And while you are at it maybe you could convince the teachers too. It sure would avoid some stikes.
  15. TellYouWhat
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    TellYouWhat - September 12, 2012 12:47 pm
    What else should we expect from a company whose chairman's last name is Crook?
  16. movedsouth
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    movedsouth - September 12, 2012 11:08 am
    "Filthy Capitalist PIGS! " ??????

    Do have a wall FULL of EMPTY pint Mason jars yet?

  17. liberal karl
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    liberal karl - September 12, 2012 9:51 am
    Filthy Capitalist PIGS! This is a GREAT EXAMPLE of how corrupt and self-serving the business ethos is here in America!

    Welch-Allen COULD HAVE cuts its CEO's salary, or asked the employees to even take a small cut in pay ALONG WITH a cut in the CEO and board's pay. But, hey--gotta maintain their "standard of living" and pay for that yacht, screw the workforce--we're going to punish YOU, AMERICAN WORKERS, for wanting to have Health Care like WE ALL HAVE!

    This makes me want to just VOMIT. America will NEVER return to its days of greatness until the Capitalist pigs who run this country learn to value the workforce as much as it values its profits! The country AS A WHOLE cannot afford to subsidize the wealth of a small cadre of individuals a the expense of the nation as a whole!!!
  18. TellYouWhat
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    TellYouWhat - September 11, 2012 7:19 pm
    Welch Allen gives a lot of money to the United Way, and they also donate to other local organizations throughout the community. I hope that they will continue to carry on these wonderful philanthropic practices.
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    ONIONRINGSNY - September 11, 2012 3:18 pm
    Batten down the hatches and update your resumes Welch-Allyn workers! The writing's on the wall!
  20. luvthemiddle
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    luvthemiddle - September 11, 2012 9:37 am
    Is Mr Meyer saying that if not for the 2.3% tax,he would be sparing these jobs in Oregon and Skaneateles? i very much doubt that That plant in Tijuana has to be much cheaper for production than anywhere in the US,otherwise Welch Allen would not have moved there in the first place. The 2.3% cost could be passed on to the consumer with very little impact which anyone in the medical products field knows to be true. If Mr Meyer feels better blaming the Affordable Care Act, so be it But with all the new patients that will have coverage and be able to have WA products used on them,it might be better to tell the truth Labor is cheaper in Mexico so we've moved jobe there See, that wasnt so hard Mr Meyer!
  21. Dan W
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    Dan W - September 10, 2012 5:28 pm
    It is the 2.3 % tax increase on medical equipemt manufactures. Caused by pass the health care bill to find out what is in it. AKA Ombama care. The jobs lost is just starting because of that in the medical manufacturing business. Before libs start screaming its the 1 pecenters and greed. The margin of profit is thin in the medical equipment manufacturing. There is global compention in the market. The killer is the tax is on the gross sales not the profit. WHo are the greedy ones? The goverment and the freeloaders it supports.
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