PharmaView: As Owings Mills Closes, Can Shire Do Right By Workers?

June 2, 2009
The closing of a facility is a chance to gauge the commitment of a company.

Another drug manufacturing site is bracing to close. In April, Shire announced that it would be phasing out production in Owings Mills, Maryland, over the next three years, and transferring production of the facility’s key products—solid dosage drugs such as the anti-convulsant Carbatrol and Pentasa for ulcerative colitis—to contract manufacturer DSM Pharmaceutical Products in Greenville, North Carolina.

Barring the purchase of the property by another company—still a distinct possibility—Owings Mills will close its doors some time around April 1, 2012.

It’s a case of a facility not aligning with the long-term strategic goals of its parent company. In this case, Shire wants to “diversify its geographic reach and therapeutic reach,” says company spokesperson Matt Cabrey, and like so many of its peers focus on biologics—including expanding its Alewife facility in Cambridge, Mass., as well as building a new facility in Lexington, Mass. “Our goal is not to become the best small-molecule manufacturing operation,” Cabrey says.

That means some 260 jobs will probably be lost. “We’ve had what we call ‘reductions in force’ before, but not to this extent,” he adds.

Ironically, things have been going well in Owings Mills. Over the past decade, Shire had expanded production and built a new technology center on the site. Site morale has been good, and productivity up, Cabrey acknowledges. Last fall, I wrote about the novel, week-long training program there that offered creative courses, brought together line workers and management, raised spirits, and generated donations for local charities. (See “Shire Goes to Camp”.)

It’s easy to be cynical whenever a plant closes, but the fact is that Shire is a big company and makes decisions based upon long-term corporate stability and prosperity. “This is not about saving money,” Cabrey says. It’s about corporate strategy. But what of the short term? What are Shire’s responsibilities towards its Owings Mills employees, and to the community?

A few years ago, I wrote about the decision to close a Wyeth BioPharma plant in St. Louis, and the experiences of Eric Good, director of project management. (See “What It Really Means to Downsize”.) As part of plant management, Good knew the facility was set to close. But few others did, and so when the “bomb was dropped” early one morning, workers felt shock and dismay, and Good left with an unsettled feeling. The site was later bought by J&J and became part of Centocor, but the question remained: Could the situation have been handled better?

This is Shire’s challenge, and opportunity, and Cabrey knows that his company will be under close scrutiny. For a company that prides itself on doing right by its employees, the closing of Owings Mills will be a litmus test: Can the company help workers to smoothly transition into life after Shire? Can it help Owings Mills and the surrounding area bounce back?

Shire has done its best to be up front with workers. “While folks are disappointed, I don’t think they’re shocked or surprised,” says Cabrey. “We’ve been very transparent about what’s been going on.” As early as a year ago, Shire met with employees to discuss the possibility of closing or selling, and has updated them periodically.

Shire is offering affected employees “comprehensive” support in terms of career counseling, job search assistance, and interview training, and it has committed to the summer training program at least for this year.

And many workers will be needed to keep the plant running for another three years. Shire is giving “retention packages”—mainly financial incentives—to those key employees who stick out the three years. “We can’t afford to have people get up and leave tomorrow,” Cabrey says. Nor can patients who count on the medicines made there.

As for the community aspect, Shire is working closely with Baltimore County to find a buyer, which would be in everyone’s best interest. Cabrey says there have been some nibbles, but no fish ready to bite. “To be frank, we had several prospects walk through the property before the final decision was made,” he says. “They were interested, but not prepared to take action.” Rather than wait with fingers crossed, Shire decided to close the plant and phase-out production while continuing to market the site.

Plant closings are complex. What devastates one worker can liberate another—a chance to make a new start. For Good, there was a tinge of “survivor’s guilt” as he stayed on at Centocor while many others did not. Time will tell in Owings Mills. Shire’s Cabrey has agreed to stay in touch over the next few years to share experiences from the site; stay tuned.

About the Author

Paul Thomas | Senior Editor