Big Pharma and the power of a union

French union scientists at Toulouse do a haka to protest salary and position cuts.
{{sniff}} I am so proud!

Derek Lowe at In The Pipeline wrote recently about French drugmaker Sanofi’s recent plans to close some sites in France.  I’ll get to that in a minute but first a little background.

A few weeks ago, Sanofi announced that it would be closing some French sites, the biggest site would be at Toulouse.  The closure would have put approximately 2300 scientists out on the unemployment rolls.  The Ministry that handles labor and unemployment had a fricking fit:

Besides unions, Sanofi has gotten an ear full from some government officials. With France’s economy struggling, the fact that Sanofi’s mother country was absorbing more of the pain, has not set well. French Productive Recovery Minister Arnaud Montebourg told senators when the cuts were first leaked: “Sanofi showed up at the ministry to tell us they were planning several thousand job cuts. Couldn’t you have said that earlier on? Last year you made €5 billion ($6.1 billion) in profits.”

And I’m sure that Sanofi would have cut elsewhere, if they had anywhere else to cut.  Last year, the company laid off all of the scientists at their main site in the US that was located in Bridgewater, NJ.  A couple dozen jobs were rescued and sent to the Cambridge, MA site, which is small, cramped and inadequate.  The rest of the projects were distributed to the French sites.  And do you want to know WHY the work went to the French sites and not to China (at least not yet)?  I’ll tell you why:

THE FRENCH SCIENTISTS ARE PROTECTED BY A UNION

Their union is pretty damn good too.  You could take every project away from them and have them just occupying the sites and playing tetris all day and the company would still have to pay them.  So, any time the company felt like research was being too much of a money pit, they took it out on the US workers until there weren’t any left.

This time, the unions threatened to strike and the French Productive Recovery Minister told the company that dumping French scientists on the labor market and relying on the government was not an option.  Usually, the companies who do business in France lay scientists off through attrition or generous early retirement packages.  A straight layoff , although rare, is still heavenly by American standards with terminated employees getting up to 80% of their salaries for 2 years and then able to go on the French public assistance program after that.  AND you don’t need to shell out half your unemployment on COBRA.  So, pretty sweet deal even if you’re being laid off.  You have time to find something else or go back to school for retraining or emigrate to Canada.  Your life isn’t thrown into an instant and chronic crisis.  And THAT, in turn, helps stabilize the rest of the economy.  The more people who can spend and keep demand up, the less of a hit the economy takes in newly unemployed people.

Anyway, it was still looking pretty grim for the French scientists until this week.  It looks like the Productive Recovery Ministry and the unions had an impact.  From Derek’s post:

here’s the announcement itself. And maybe this is my first impression, but compared to what’s gone on in other Sanofi sites (like Bridgewater), this one comes across like a shower of dandelion fluff. No reduction in the number of sites, no actual layoffs – just 900 positions to phase out, mostly via attrition, over the next two years. The Toulouse site is the only loose end; that one is the subject of a “working group” to figure out what it’s going to do, but I see no actual language about closing it.

Here’s more from FiercePharma’s article on the cutbacks in France:

A key official in France is keeping up pressure on Sanofi about its planned work force reductions in the country, sticking to the position that the drug giant ($SNY) hasn’t done enough to protect jobs. And French Industry Minister Arnaud Montebourg makes clear in reports today that he isn’t satisfied with how the company plans to secure the future of its R&D site in Toulouse.

Montebourg has been a thorn in the side of Sanofi. Early this week Sanofi softened its stance on job cuts in France, saying the company would seek to shrink its work force in the country by 900 jobs through early retirements and voluntary moves and transfers in the next few years, as opposed to the 2,300 to 2,500 jobs at the company previously estimated to be on the chopping block. Yet the minister and others keep harping on Sanofi’s unresolved plan for its Toulouse site, where 600 additional jobs hang in the balance.

Sanofi wants to part ways with research in Toulouse, and said earlier this week that it would work with stakeholders in the coming months to solidify plans to keep the operation alive, Reuters reported. That too fell short with Montebourg and unhappy Sanofi workers and labor officials.

“Trade unions are right to say this is too much,” Montebourg told BFM television, as reported by Reuters. “The government thinks this is too much and we want guarantees for Toulouse.”

Sanofi CEO Chris Viehbacher, who has reportedly met with the industry minister, has found resistance in his strategy to double down on productive R&D centers while making cutbacks at those that fail to meet expectations.

You know, if Chris Viehbacher wanted to preserve the company’s most productive sites, maybe he should have kept the US scientists on their tree-lined campuses instead of keeping them in a high state of suspense for several years, terminating their projects and then stupidly laying them off and closing the site.  No wonder the French Ministry doesn’t believe a single thing he says.

So, there you go, folks.  If you want to stand up to the bonus class and save your jobs, you need to get a union and the government behind you.  Or maybe just the government behind you.  You don’t need to work 24/7 like a maniacal drone on crack, cranking out work and trying to impress everyone working like crazy, singing, “I really need this job.  Oh, God, I need this job” to guys on Wall Street who don’t give a shit anyway.  No, you have your union representatives negotiate a contract that makes it extremely painful for the company to drop its commitment to you.

Not only that, but the union has to be very, very active and visible, like standing outside the cafeteria, handing out grievance pamphlets and making its presence very known to the management.  Imagine going to lunch to eat your company subsidized baguette, custom prepared omelet and glass of red wine and being greeted at the door by a union person dissing the management and getting away with it.  (Oh, yes, it really happens, I saw it with my own eyes.)  Take a look at that picture.  Does that look like a bunch of broken human beings, cowering under the whip they’ve been forced to kiss, cringing in fear of being fired for speaking up or fighting for their rights?  Damn straight it doesn’t.

That’s why I keep saying that drug discovery will survive in Europe. They’ll have an infrastructure in France and Germany and the expertise that is acquired from having stability and continuity of uninterrupted research.  They’ll be able to keep pace with this rapidly changing explosion of biological discoveries while thousands of US scientists will be trapped in routine, unchallenging CROs or having their expertise rotting from disuse.  Maybe they won’t be as productive as the US researchers used to be or as ingenious as possible but, by golly, they may be all the world has left unless and until the Chinese and Indians can stabilize their business environment and take the lead in research.  It’s not easy and it will take some time before that happens.  The finance guys are going to have to take an old, cold tater and wait, not something they’re good at.  They’re going to be mad that they can’t transform our salaries into their bonus gold, but such is life.  The French government is finally standing up to them and saying “Non”.  In this case, the unions are actually doing them a favor, giving them an excuse to keep the technological expertise in the country and giving it an edge when the recession finally eases up.  The government will soak the corporations for salaries, not the workers for absolutely everything.

The bad news is that now that Sanofi has been forced to scale back their cutback plans in France, they’re going to have to take it out on their remaining employees elsewhere, like their site in Cambridge, which is already tiny, and their exploratory facility located in Tucson, Arizona.

So, for those of you professionals who are watching in horror at what happened to the scientists in this country, take note: get a union.  The problem of unemployment among us is not structural.  There are plenty of us and many of us are willing to relocate or work from home.  The problem is that the big guys don’t want to pay us for our expertise.  So, they’re going to keep spreading this lie that they can’t find enough qualified workers.  The real problem is that OUR government is not on OUR side.  The Obama administration would rather this country lost its technological edge and make precariats of us all than to stick up for us when the finance guys calculate their bonuses based on how many R&D bodies they can chop.

Sad but true and this story is proof.