St. Jude Medical is moving its overseas manufacturing of cardiac rhythms management products out of Sweden, laying off 450 Swedish employees in the process. Production is being moved to Puerto Rico and Malaysia.
According to the company's president and CEO, Daniel Starks, U.S. cardiac rhythms management product sales are 28% of the company's revenue, with $401 million in sales in the last quarter. The products include pacemakers and ICDs.
"Although the CRM market contracted during the first quarter and may continue to contract on a year-over-year basis throughout the remainder of 2011, we continue to believe that, for us, the CRM market glass is half full, not half empty," Starks told analysts (as quoted by Twin Cities Business. "We took share from both of our major competitors in the CRM market in 2010 and expect to do so again in 2011 and again in 2012." Those competitors are Medtronic and Boston Scientific.
While the move will cost $60 million to $80 million, executive vice president and CFO John Heinmiller said the subsequent savings in production will make up for the costs incurred. The company will hire new employees in Puerto Rico and Malaysia, spokeswoman Amy Jo Meyer told Twin Cities Business.
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