Bayer is closing a plant in Emeryville (California) less than two years after the company received huge tax benefits from the Berkeley and Oakland City Councils. Already last year Bayer announced the laying off of union workers in Berkeley. Less than a handful of Bayer´s fifty factories in North America remain unionized. Especially in the US the company conducts aggressive anti-union campaigns. Only 14% of Bayer´s North American workforce have collective agreements on wages and working conditions, in comparison to 42% in Latin America and 88% in Europe.

San Francisco Business Times - May 26, 2011

Bayer closing Emeryville plant, shedding 540 jobs

Bayer HealthCare will ditch 540 jobs in Emeryville as it shifts production of its blockbuster multiple sclerosis treatment over two years to a contract manufacturer.

It is the latest in a series of turns by Bayer in the Bay Area, including a $100 million expansion of its Berkeley facility, and the broadening of its research work as it moved R&D from Richmond to San Francisco’s Mission Bay enclave.

After it closes in 2013, the Emeryville facility will return to Novartis, from whom Bayer leased it in September 2007. Novartis’ plans for the facility were not disclosed.

The plant makes the multiple sclerosis drug interferon beta 1-b, which is branded in the United States as Betaseron and abroad as Betaferon. It generated about $1.6 billion in revenue in 2009. Workers at the Emeryville plant will receive severance pay, “stay bonuses” and help in finding new jobs. Bayer said the workers also could relocate to other Bayer sites with job openings.

“The employees of the Emeryville Supply Center have done an excellent job in delivering a reliable supply of Betaferon/Betaseron for global markets,” Joerg Heidrich, global head of biotech product supply for Bayer HealthCare, said in a press release. “However, with growing cost and competitive pressures, this new strategy leverages the capabilities and capacity of a (contract manufacturing organization) knowledgeable on this product while providing Bayer with a more flexible and cost-competitive long-term manufacturing solution.”

Bayer officials weren’t immediately available to comment following a hastily called press conference Wednesday. Among the questions unanswered was how much Bayer would save with the move, the name of the contract manufacturer and where the drug would be manufactured. Bayer HealthCare is a subgroup of Bayer AG, based in Germany.

The drug already is made by the contract manufacturing organization, or CMO, for many markets in Europe, according to Bayer. The U.S. Food and Drug Administration recently licensed the CMO facility, according to a Bayer spokesperson.

Betaseron, which treats relapsing forms of MS to reduce the frequency of flare-ups, is a protein product made by bacterial fermentation of a strain of Excherichia coli. The resulting product bears a genetically engineered DNA molecule that contains the gene for human interferon beta. Bayer in 2007 agreed to lease the Emeryville facility for six years, with two one-year options, after Novartis bought Chiron Corp. in 2006. Chiron had produced Betaseron at the Emeryville plant under a 1993 agreement with Schering AG, but Novartis’ acquisition triggered a provision that allowed Schering, which Bayer bought in 2006, to take over Betaseron production. Novartis has since introduced its own version of interferon beta 1-b.

Bayer’s decision to close the plant comes less than two years after Bay Area economic development leaders extended Oakland’s tax-cutting enterprise zone to include Bayer’s Berkeley hemophilia drug manufacturing facility, the focus of a $100 million expansion. It also comes a year after Bayer opted to leave Richmond to set up an R&D hub in San Francisco’s Mission Bay biotech enclave, where it is eligible for enterprise zone benefits and an exemption from the city’s payroll tax. by Ron Leuty

see also:
· Bayer US: Layoffs despite Tax Breaks / only 14% of US-workers have collective agreements
· Bayer looking for tax incentives / Berkeley Facility Threatening to Outsource Work