Profit Decline Prompts Allergan to Shut Lens Factory

Trying to hold down costs in response to declining profits, Allergan Inc. said Wednesday that it will close its contact lens manufacturing plant in New York next year and transfer those operations to a facility in Waco, Tex., and its corporate headquarters in Irvine.

The eye and skin care company said it will eliminate 280 jobs at its plant in Woodbury, N.Y. At the same time, Allergan said it will create 135 jobs in Waco and hire 45 to 50 people in Irvine to perform customer service, research and development, and administrative services for the company’s lens manufacturing business.

After the latest changes are complete, the company will have a net loss of about 95 jobs, said Allergan spokesman B. Norris Battin.

“This will improve the efficiency of Allergan’s business. We will be able to manufacture our products at a reduced cost,” Battin said.

In 1988, Allergan began shifting most of its manufacturing operations from Irvine to Waco to take advantage of lower land and labor costs. After the New York plant closes, Battin said, all of Allergan’s contact lenses will be produced in Waco, where the company’s lens care products already are manufactured.

Allergan is trying to reduce costs to help improve its profits, which have been slipping because of delays in getting a new lens cleaning product to market and an industrywide decline in the number of new lens users over the past 12 months.

For the second quarter ended June 30, the company’s earnings fell 20% to $17.1 million from $21.5 million for the same period in 1989.