Tax Hikes Lead to Elimination Of Over 1,000 Jobs At Just One Kalamazoo Orthopedic Company
Even as Michigan grapples with one of the highest unemployment rates in the country at 10.6 percent, it’s unfortunately about to get worse for Michigan workers and small businesses as a result of the massive health care bill rammed into law last year by Senate Democrats, including Michigan’s junior Senator Debbie Stabenow.
Stryker, an orthopedic company from Kalamazoo, became the latest American company to announce layoffs because of the new tax hikes included in the Obama-Stabenow health care law. Given that the Wolverine State is home to over 1,600 medical device companies, this surely won’t be the last company that will be forced to reduce its workforce to pay for this job-killing tax.
As the Kalamazoo Gazette reports:
“Stryker Corp.’s plans to cut its worldwide workforce by 5 percent by the end of 2012 and take other restructuring steps in order to cut its operational costs could mean a loss of about 1,002 of its worldwide workforce, and a loss of about 112 workers in the Kalamazoo area, if the cuts are made across-the-board. … The company said the restructuring and cost-cutting are needed to prepare for a new Medical Device Excise Tax scheduled to begin in 2013. Industry officials have said the excise tax will significantly add to the cost of medical products made in the United States.”
Notably, this comes on the heels of Boston Scientific’s warning that the medical device tax could kill 45,000 jobs nationwide.
“When Senator Stabenow rubberstamped President Obama’s government-run healthcare bill into law, she didn’t just cut Medicare by $500 billion to pay for this $2.5 trillion experiment, she also voted to raise taxes on Michigan’s 1,673 medical device companies which will soon force Kalamazoo’s Stryker to reduce its workforce,” said National Republican Senatorial Committee (NRSC) spokesman Jahan Wilcox. “With nearly 500,000 unemployed Michiganders, it’s clear the Wolverine State can’t afford the tax-and-spend, job-killing agenda of Debbie Stabenow.”
Background…
Government-Run Healthcare Is A Job-Killing Law For Michigan’s Medical Device Companies And Their Employees
Kalamazoo’s Stryker Orthopedic Company Will Soon Reduce Its Workforce By 5 Percent By 2012 To Pay For Stabenow’s Medical Device Tax. “Stryker Corp.’s plans to cut its worldwide workforce by 5 percent by the end of 2012 and take other restructuring steps in order to cut its operational costs could mean a loss of about 1,002 of its worldwide workforce, and a loss of about 112 workers in the Kalamazoo area, if the cuts are made across-the-board. … The company said the restructuring and cost-cutting are needed to prepare for a new Medical Device Excise Tax scheduled to begin in 2013. Industry officials have said the excise tax will significantly add to the cost of medical products made in the United States.” (Al Jones, Stryker Corp.’s plan to cut its workforce may mean 112 jobs lost in the Kalamazoo area, Kalamazoo Gazette, 11/11/11)
Boston Scientific Says Obama’s Medical Device Tax Could Kill 45,000 Jobs Nationwide. “Boston Scientific’s chief executive yesterday ripped a tax on medical devices slated for 2013 and anticipated major layoffs at the Natick company if the levy — part of President Obama’s health-care overhaul — isn’t repealed. … Elliott’s comments came a week after trade group AdvaMed released a study finding that the 2.3 percent federal excise tax would lead to more than 45,000 job losses nationwide …” (Greg Turner, Boston Scientific CEO: Medical tax will mean job cuts, Boston Herald, 09/15/11)
Lorain County, OH: The Threat Of Obama’s $20 Billion Medical Device Tax Caused Businesses To Stop Hiring. “[I]n the short run, some of his policies could cost existing jobs, especially health-care reform, if it is enacted. One of the few large businesses that has prospered in Lorain County in recent years has been Invacare, a maker of home medical devices … The company has 1,300 employees in Lorain County but has stopped hiring in anticipation of a tax on medical devices that was proposed to help pay for the president’s health-care reform plan.” (Michael A. Fletcher, “Assessing Obama’s Promises Of Jobs In A Hub Of Manufacturing,” The Washington Post, 1/22/09; “Estimated Revenue Effects Of The Manager’s Amendment To The Revenue Provisions Contained In The ‘Patient Protection And Affordable Care Act,” Joint Committee On Taxation Report, 3/20/10)
Massachusetts Medical Device Companies Said Tax “Could Stifle Innovation, Drive Jobs Overseas, And Force Them To Raise Prices.” “On the same day, Patrick hosted more than a dozen representatives from the Massachusetts medical device industry at the State House. They told him the tax could stifle innovation, drive jobs overseas, and force them to raise prices. Richard A. Packer, chief executive of defibrillator maker Zoll Medical Corp., based in Chelmsford, has met with Brown and Patrick to discuss the issue. ‘I think the medical device bill is ill-conceived, and is not a good part of the legislation,’ he said. ‘I’m in favor of repealing it in total, or going in and seeing how it can be adjusted.’” (D.C. Denison, “Repeal Of Medical Devices Tax Unlikely,” The Boston Globe, 4/3/10)
MassDevice.com’s Brad Perriello Said The Medical Device Tax Will Cause More Pain For “Mid-Sized And Smaller Companies,” Pushing Some “From Black To Red.” “I think the real impact is going to be on the mid-sized and smaller companies, where profit margins are a lot more narrow, and in some cases are so narrow that the effect of the tax will push a small minority of the companies from black to red…” (Annie Baxter, “Excise Tax Has Local Medical Device Makers Concerned,” Minnesota Public Radio, 3/29/10)
2,200 Jobs At Allergan, An Irvine, CA Based Medical Device And Pharmaceutical Company, Are At Risk. “David Pyott, chairman and CEO of Allergan, a global pharmaceutical and medical device company based in Irvine, met with me Wednesday to discuss the hard implications of President Obama’s health care bill and how it will affect Pyott’s company and the broader health care industry. To put things in perspective, Allergan employs about 8,300 people worldwide, and roughly 2,200 of them work in Irvine (well over 200 are UC Irvine graduates). The company had revenue of about $4.5 billion last year.” (Brian Calle, Op-Ed, “CEO Series: Obamacare Impact,” The Orange County Register, 4/25/10)
