Greatbatch Medical, a subsidiary of Greatbatch, Inc. (NYSE:GB), today announced a proposal to consolidate its orthopaedics manufacturing operations. The move is designed to enhance operating efficiencies and drive global growth opportunities.
Under the proposal, most major functions currently performed at the company’s sites in Orvin and Corgemont, Switzerland would transfer into existing Greatbatch Medical facilities in Fort Wayne, Indiana and Tijuana, Mexico by the close of 2013. There are currently 196 persons employed in the Orvin and Corgemont facilities, of which up to 90% could be affected by the current plan.
The presentation of this plan follows particularly difficult orthopaedics market conditions since Precimed became part of Greatbatch. Beyond the economic slowdown immediately following the acquisition, customers have started to put more and more emphasis on product pricing as well as slowed down the rate at which they launch major joint replacement programs.
“This consolidation would optimize utilization of our existing operating infrastructure while enhancing the overall competitiveness of the business,” said Mauricio Arellano, president of Greatbatch Medical. “The resulting cost savings would permit continuous investments in both our commercial strategy and medical device innovations.”In accordance with Swiss regulations, employees have a consultation period to provide individual and collective input on the proposed plan prior to any final decision being made. The intended close of the consultation period is July 20, 2012. The company remains committed to the global and European orthopaedics markets, with the proposed structure being even more capable of meeting customer design and technical support needs. A limited number of sales, administrative and technical roles would likely remain in Switzerland, aligned with Greatbatch Medical’s regional operating model. Mr. Arellano continued, “We are intensely focused on growth in our core business, growth through targeted acquisitions and growth through new, innovative medical devices. Our intention to relocate select production to more highly-efficient sites would be yet another step toward our vision of developing complete medical systems and devices.”