Baxter Intl. to Lay Off 6,400, Close 21 Plants : Hospital supplies: The firm’s Fenwal unit in Santa Ana makes blood-separating equipment, and its Paramax in Irvine makes diagnostic equipment.
Baxter International Inc., one of the world’s largest makers of hospital supplies, announced plans Wednesday to lay off about 6,400 workers and close or sell 21 plants in an effort to trim costs and narrow its scope.
In addition to the 10% work force reduction and consolidation of manufacturing facilities, Baxter indicated that it will sell several businesses, raise prices on many products and channel more money into research and development.
“These decisions are in the best long-term interests of all of our constituencies,” said a statement by Baxter Chairman Vernon R. Loucks Jr.
“Baxter must keep evolving to help its customers meet their objective of providing high-quality health care while controlling costs,” Loucks said.
Baxter has extensive operations in Southern California.
The layoffs are expected to have “very modest impact” on Baxter’s Orange County operations, which employ about 3,000 workers. Two of Baxter’s key businesses, the Edwards division, which makes heart valves and other cardiovascular products, and the Bentley division, which makes oxygenators used in open heart surgery, are based in Irvine.
Baxter spokesman Les Jacobson reported that Michael Estes, corporate vice president of Baxter and head of its medical specialties devices business, said earlier this week that one of the objectives of the restructuring would be to strengthen the Edwards and Bentley divisions. Jacobson said Estes stressed that Baxter had no intention of divesting these operations.
Other smaller Baxter units in the county, Jacobson said, include the Fenwal automated systems division in Santa Ana that makes blood separating equipment, the Paramax systems division in Irvine that makes diagnostic equipment, a regional distribution center in Garden Grove and a hospital supply division office in Irvine.
Baxter also has several facilities in the San Fernando Valley. The Hyland division, which makes plasma products, has three facilities--in Glendale, on the Glendale/Los Angeles border and in Duarte--that together employ about 1,000. A division in Valencia employs 400 and makes various medical products for hospitals. Jacobson declined comment on those facilities.
Baxter, based in the Chicago suburb of Deerfield, said the cost of the restructuring would result in a first-quarter loss of $375 million to $400 million, or $1.50 to $1.60 per share.
The company said the changes would generate annual pretax savings of up to $275 million by 1993 and help Baxter achieve annual growth of 15% to 18% in operating income over the next several years.
