Cook Medical says it will not proceed on plans to open 5 new facilities in the midwest because of concerns about the medical device tax, according to published reports.
Pete Yonkman, executive vice president of strategic business units at the Bloomington-based medical device company told the Indianapolis Business Journal that the company will likely pay between $20 to $30 million once the 2.3% excise tax takes effect in January, 2013.
Speaking at a breakfast meeting hosted by the paper, Yonkman said the company had recently renovated an abandoned plant in Canton, Ill. and had hoped to do more but the tax levy had put an end to those plans.
“We had hoped, as we get bigger, that that would be our model for expansion,” Yonkman told the paper. “To take these small manufacturing facilities and bring them to these communities, that had been hard hit by jobs leaving, because the work ethic is amazing and the people are really supportive and excited.”
Cook officials have long been vocal opponents of the tax.
In January, Cook Group chairman Stephen Ferguson called the medical device tax a "bad idea that will only get worse with time," and estimated that it will result in a 15% cut in Cook’s bottom line.
However, recently Ferguson has been more optimistic that the tax could be overturned. He told MassDevice last month that he felt the tide was turning in the fight against the levy, especially among lawmakers.
"There are a substantial number of senators, both Republicans and Democrats, who have expressed support for the repeal of the tax," he told us. "The question is, will leadership allow it to come to the floor for a vote? I think if it comes to the floor for a vote, there are sufficient votes to pass the repeal."
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