Greatbatch proposes to mostly exit Switzerland for Indiana, Mexico | Wall Street Beat

July 3, 2012 By MassDevice staff Leave a Comment

Greatbatch (NYSE:GB) said it wants to largely shutter a pair of plants in Switzerland and relocate their operations to Ft. Wayne, Ind., and Tijuana, Mexico.

The Clarence, N.Y.-based company said the slumping orthopedics market and downward pricing pressures are precipitating the move, which is expected to affect 90% of the 196 workers at the plants in Orvin and Corgemont, Switzerland – or about 176 employees.

Under Swiss law, Greatbatch must provide a comment period for employees before putting the plan in motion. The Swiss workers have until July 20 to give their input; the company is hoping to execute the move by the end of 2013.

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"The presentation of this plan follows particularly difficult orthopaedics market conditions since Precimed became part of Greatbatch. Beyond the economic slowdown immediately following the acquisition, customers have started to put more and more emphasis on product pricing as well as slowed down the rate at which they launch major joint replacement programs," according to a press release. "The company remains committed to the global and European orthopaedics markets, with the proposed structure being even more capable of meeting customer design and technical support needs. A limited number of sales, administrative and technical roles would likely remain in Switzerland, aligned with Greatbatch Medical’s regional operating model."

"This consolidation would optimize utilization of our existing operating infrastructure while enhancing the overall competitiveness of the business. The resulting cost savings would permit continuous investments in both our commercial strategy and medical device innovations," president Mauricio Arellano said in prepared remarks. "We are intensely focused on growth in our core business, growth through targeted acquisitions and growth through new, innovative medical devices. Our intention to relocate select production to more highly-efficient sites would be yet another step toward our vision of developing complete medical systems and devices."

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