AstraZeneca feels sting of union backlash against R&D upheaval

AstraZeneca CEO Pascal Soriot

First, AstraZeneca ($AZN) announced plans for a major R&D reorganization aimed at putting its scientists closer to the action inside a major global biotech hub. Now comes the union backlash, complete with rumblings of a possible strike aimed at forcing the new CEO to backpedal on the move.

U.K. trade union leaders were already scheduled to sit down with AstraZeneca management today to take a look at wages and benefits. But Monday's announcement that AstraZeneca will shut down its big R&D efforts in Alderley Park not far from Manchester--laying off 550 workers with plans to relocate 1,600 in a new R&D facility in Cambridge--has upset some powerful unions.

Asked about a possible strike, Unite's Gary Owen told the Manchester Evening News that "it's certainly in the back pocket, but it's also in the long grass. We have to try to move forward sensibly and see what we can do through dialogue and proper consultation. We would only go to our members if we felt we were being rail-roaded." Owen added that most of the 1,600 R&D staffers expected to move to Cambridge may well just stay put, leaving the northern region with far more highly skilled tech workers than it can find jobs for.

Unite's national officer, Linda McCulloch, has been more outspoken. "Unite will be meeting with the company to demand that AstraZeneca rethinks this decision and looks at alternatives to relocation," she told reporters, according to the Alderley Edge. "The union will be making it a priority to contact local MPs to urge them to intervene. The government has a clear duty to act and encourage AstraZeneca to continue to have a strong presence in the north west. In the middle of an economic crisis this government should do everything possible to stop AstraZeneca from turning its back on the north west."

In the U.S., major R&D shutdowns like this are executed with barely a murmur of public protest, as Roche ($RHHBY) found when it decided to close its big operation in Nutley, NJ. Pfizer ($PFE) also scaled back big time in Groton, Connecticut. In Europe, though, where unions represent a more powerful and cohesive force, any upheaval can trigger protests. Sanofi ($SNY) found that out with a vengeance last year when it unsuccessfully tried to persuade its French workers to accept a big reorganization. Merck KGaA, though, managed to push through with plans to shutter its big facility near Geneva, easing the backlash by aggressively supporting startups and looking for new jobs for the staff. And as Pfizer proved with its unopposed decision to gut operations in Sandwich, the U.K. workers are likely to prove far less influential than the French in spurring a backlash.

Local politicians signaled their intent to move on. 

"Although it is a very sad day to see these jobs go we can use the legacy of the infrastructure left behind to make this an attractive place to do business," Frank Keegan, Cheshire East councillor for Alderley Edge, tells the Evening News. "We've got the road and rail network already here and if we can find the right funding we can hopefully sustain our thriving local economy. It's a huge blow but we must remember that AstraZeneca has been reducing for some years and these jobs will disappear gradually over two years, meaning we must now prepare for the future." Keegan is backing an effort to make over Alderley as an R&D hub.

Mene Pangalos

AstraZeneca also shows no signs of wavering on an ambitious plan to concentrate headquarters staff and researchers inside the big Oxbridge hub to the south.

"This is about the overall scientific eco-system we are moving to," research chief Mene Pangalos told reporters. "It's when you look at the totality at what's available in Cambridge and London that we reached (our) decision."

- here's the story from the Manchester Evening News
- read the report from the Alderley Edge

Special Report: AstraZeneca - Biopharma's Top R&D Spenders - 2012