ICN Workers Protest Yugoslav Takeover

More than 1,000 ICN Pharmaceuticals Inc. workers walked off the job Monday to support their boss, Milan Panic, in his fight to take back a factory seized by the Yugoslav government.

But police here turned the screws still tighter on ICN’s Yugoslav subsidiary by arresting six of his local vice presidents, Panic said.

“I think this is not about business anymore,” Panic, chairman and chief executive of the Costa Mesa-based company, said in a telephone interview from Hungary. “This is violating the human rights of these people. This cannot be left unpunished.”

The government seized the Yugoslav subsidiary here Friday, and police armed with assault rifles entered the plant Saturday to impose new management.

Panic is a former Yugoslav prime minister and political archenemy of Yugoslav President Slobodan Milosevic, who is fighting U.S.-led pressure to make a permanent peace with ethnic Albanian rebels in Kosovo province or face attack by North Atlantic Treaty Organization forces.

Panic sees the government’s move, which he labeled a nationalization, as part of an anti-American campaign stirred up by Serb nationalists opposed to current Kosovo peace talks in France and to plans for putting about 30,000 NATO troops in Kosovo if a deal is reached.

Although they refused to blame Milosevic by name, both Panic and his general manager, Dusan Mitevic, left no doubt they believe that the Yugoslav president was behind the seizure of ICN’s plant.

“You have to keep in mind that the main way this government functions is through personal authority,” Mitevic said. “Only one personality has power here. All others are executors.”

The state-run Health Fund of Serbia owes ICN’s Yugoslav subsidiary more than $176 million that the government said in July it wouldn’t pay, Mitevic added.

In seizing the factory, the Yugoslav Federal Ministry of Health alleged that ICN had failed to make investments as required by a 1991 agreement to purchase control of the plant, according to Bloomberg News. The government agency said ICN was obliged to transfer $220 million in drug patents to its Yugoslav subsidiary in addition to investing $50 million in cash. ICN says it’s made all required investments.

If the government has a disagreement with ICN, Panic said, the contract between the two parties stipulates that a panel of three judges sitting in Paris should resolve the dispute.

Panic promised a year’s full pay and benefits to employees who swear allegiance to his ownership, stop working for the new managers and sign a boycott pledge.

About 80% of the plant’s 2,000 staff stayed off the job Monday and about 1,800 signed a promise to stand behind him, he maintained.

The government insists 1,600 people returned to work. Serbian Health Minister Leposava Milicevic said many were former employees who had been fired by Panic in the past for organizing unions.

The ICN factory is Yugoslavia’s largest drug manufacturer and, until Friday, its biggest privately owned company. Panic bought 75% control of the firm from the Yugoslav government in 1990. Following the seizure Friday, the government claimed it now owns 65% of the company.