Medtronic CardioVascular began the final phase today of a four-year project that will complete the transfer of manufacturing for several of its medical devices to Galway, Ireland. The move affects 240 local manufacturing and support personnel, reducing employment levels at the company's two Santa Rosa units to about 900.
According to Director of Operations Don Chigazola, about half of the affected workers have been placed on 60-day paid notice and will not return to work on Monday. In addition to the paid-notice period, all 240 employees will receive a full week's pay for each year of service at Medtronic, with a minimum of four weeks' pay. Medtronic will also pay 50 percent of COBRA benefits for two months, and President Obama recently announced an extension of COBRA benefits, which will work to the employees' advantage.
Medtronic has received a favorable Trade Adjustment Assistance decision from the U.S. Department of Labor for additional worker benefits since the jobs are being sent overseas.
The company is hosting workshops on resume writing and interview skills and holding job fairs as well, said Chigazola. The first drew a very positive response, with 12 representatives from North Bay companies and HR agencies. They view the Medtronic talent pool as a rich resource to draw from, he said.
"We're keenly aware that this is a difficult time to put people out in the job market. They are part of our family."
The move of most manufacturing to Galway comes as part of the restructuring of the Santa Rosa site into a center of excellence for research and development. The transfer of what was a 550-employee operation five years ago also takes advantage of the 11 percent corporate tax rate in Ireland, compared with 35 percent in the U.S.
Joe McGrath, director of public relations, warned that more layoffs would be announced early in the company's next fiscal year, which begins Monday.
"We're not immune to the global economic slowdown, or to Medicare and Medicaid cutbacks in reimbursements to hospitals for certain procedures," said McGrath. "Further restructuring will be necessary for us to stay ahead of the curve and continue to grow."
Medtronic's cardiovascular division, which makes coronary stents, aortic stent grafts and heart valves, had revenues of $2.2 billion in fiscal 2008 and remains one of Sonoma County's largest employers. The two local units, headquartered in Santa Rosa, accounted for $1.4 billion of that total. The company's fiscal 2009 earnings will be announced May 19.
Back to HCB News
