Private medical device maker giant Cook Medical put $19 million into a new Illinois manufacturing facility, possibly the company’s last in the U.S.
Cook, the word’s largest privately held medtech company, today cut the ribbon a new plant in Canton, Ill., hometown of company founder Bill Cook, who died last year.
The opening ceremony for the facility, dubbed Cook Polymer Technology Canton, was attended by Cook executives as well as by local political officials who lauded the company’s efforts to stimulate the local economy and bring jobs to Cook’s birthplace.
Bill Cook and his wife Gayle sowed the seeds of Cook Medical in a bedroom apartment in Bloomington, Ind., where Bill started developing catheters, wire guides and needles, company spokeswoman Sarah Willey told MassDevice.com in an email.*
"As you know, Cook Medical is the largest privately owned med-device company in the world," Willey added. "What you may not know is that Cook has never had a layoff since opening nearly 50 years ago. Cook has never closed a plant. It has grown in revenue and employees every year, and now employs 10,000 people in the U.S."
The newly opened plant will bring 60 high-skill jobs to Canton and joins another local facility the company built 2 years ago. The added jobs will bring Cook’s total Canton workforce to more than 350, according to a company statement.
"At Cook, we have always believed in reinvesting revenues earned here and abroad in new manufacturing facilities that create jobs for people, while ensuring that the Cook organization continues to grow," Cook president Kem Hawkins said in prepared remarks. "Over nearly 50 years, Cook has reinvested more than $1.5 billion dollars in plants across the U.S. and in key facilities overseas that now employ 10,000 people. And we hope circumstances will allow us to continue that tradition."
One circumstance in particular that may prevent future investments into U.S. plants is the impending 2.3% medical device tax that’s slated to take effect in January.
Earlier this year Cook Medical spiked plans to build 5 new facilities in the Midwest because of concerns over the cost of the new tax, which medical device makers will have to pay on sales of each affected product starting January 1, 2013.
Some reports estimate that Cook’s tax tab may top $20 to $30 million next year. Company chairman Steve Ferguson said late last year that the levy would cut 15% off of the company’s profits.
"For a company like ours, which pays 35% of our net earnings in federal corporate taxes and another 4-to-5% in state and local corporate taxes, the excise tax translates to another payment that will consume 15% more of our earnings," Ferguson said. "This creates tremendous pressure for us to move manufacturing to Europe and other parts of the world."
Ferguson and Cook Medical have been vocal opponents of the med-tech tax, calling it a "bad idea that will only get worse with time," and saying it will result in a 15% cut in Cook’s bottom line.
"If you want to drive an industry outside of the U.S., that’s the perfect storm to do it," Ferguson told MassDevice.com in January. "It’s like you just threw another stone into the ship and it’s now sinking."
Ferguson assured us that the company would survive the blow, but that U.S. workers and patients have the most to lose when the tax takes effect.
*Correction, Sept. 7, 2012: This article originally put Cook Medical’s founding in Canton, Ohio. Return to the corrected sentence.
