GSK: Triangle jobs may be shaved

Company aims to save $1.4 billion in 3 years

A top executive at GlaxoSmithKline said in February that the drug maker wouldn't follow its big rivals in slashing thousands of jobs to offset slowing sales.

The GSK way is to shave every day, not grow a beard and cut it off when the stubble is irritating, pharmaceuticals president David Stout said then.

On Wednesday, GSK acknowledged its way isn't working.

The company plans to close sites and cut jobs to save up to $1.4 billion in annual costs over the next three years. Stout confirmed jobs in the Triangle might be on the line, but officials won't disclose details. Stout said that GSK would retain a "strong presence" here.

Still, the threat of cuts put elected officials, economic developers and GSK employees in the Triangle on edge.

Ken Atkins, executive director of Wake County Economic Development, thinks it would be foolish not to worry.

"You never know how it works out," Atkins said. "The decision isn't made locally. They'll do what is best for the company."

With a local work force of about 6,000, GSK is one of the region's most important employers.

The British drug maker has a U.S. headquarters in Research Triangle Park, where it employs more than 4,800 well-paid executives, researchers and marketing personnel.

It also has a manufacturing plant in Zebulon. It's one of GSK's largest production facilities and the town's largest employer. More than 1,100 workers produce and package about $5 billion worth of drugs annually, including Imitrex for headaches, Combivir for HIV and antidepressant Wellbutrin.

Two years ago, GSK was promised about $4.4 million in state, county and town incentives to modernize and upgrade equipment at the Zebulon plant. The $92 million upgrade was to improve the plant's chances of winning more manufacturing projects within GSK and to create about 200 jobs by the end of 2009.

To sweeten the lure and beat out other GSK plants vying for the expansion, Wake County changed its incentive policy, Atkins said.

"I hope, because we did that, as GSK is looking at reducing manufacturing capacity worldwide, that Zebulon will be spared," he said.

The first facility GSK plans to close is a manufacturing plant in Cidra, Puerto Rico, which employs about 900. Among the medicines that plant produced for the U.S. market is Avandia, GSK's second best seller last year. Prescriptions for the diabetes pill are down sharply since May, when a study linked the drug to an increased risk of heart attack.

The company still isn't ready to release details about how cost cuts could affect the Triangle.

"Not all decisions are made," GSK spokeswoman Nancy Pekarek said Thursday.

The announcement Wednesday followed similar steps by other drug makers such as Pfizer and AstraZeneca. The world's biggest pharmaceutical companies are losing sales to generic medicine. They're also struggling to win approval for new money-making treatments amid tougher regulatory scrutiny.

Still, should GSK employees in the Triangle lose their jobs, Atkins suggested, they might find employment at other drug manufacturing plants, including Wyeth in Sanford, Merck in Durham and Talecris in Clayton.

Novartis is building a vaccine manufacturing plant in Holly Springs that is expected to create 350 jobs during the next four years.

"There are job opportunities in the same industry without having to move," Atkins said.

Zebulon Mayor Bob Matheney said the progress of the plant's expansion is calming his nerves. "It's a little premature to go into panic mode," Matheney said.

GSK had invested $88 million and created 96 jobs at the plant as of Jan. 1, said Emily Lucas, the town's finance director. That's ahead of requirements to qualify for the incentives, Lucas said.

Also, Lucas said, when she talked with GSK officials at the Zebulon plant this summer, they suggested that additional expansions may be ahead.

"Unless [GSK] decides to kill the expansion -- and nobody has given us any indication of that -- you have to come away with a good feeling," Matheney said.