Italian Owner Orders Sorin Biomedical Closure
Irvine medical device maker Sorin Biomedical Inc. will shut down by the end of the year, laying off about 250 employees, company executives said Tuesday.
The cuts are part of a consolidation by the company’s parent, Italy’s Sorin Biomedica SpA.
On Monday, the Italian company closed a $247-million deal to acquire COBE CV of Denver, a leading manufacturer of cardiopulmonary systems.
Sorin Biomedical’s work will be split between COBE’s manufacturing plant in Denver and Sorin’s facility in Mirandola, Italy.
“COBE makes exactly the same kind of products as we do,” Chief Financial Officer Wayne Krachun said in explaining why the Italian conglomerate opted to eliminate its Irvine operation. “The difference is, they own the property there and they’re a lot bigger.”
COBE’s Denver site employs about 1,000 people and has enough land to expand, Krachun added.
The moves came as little surprise to Sorin assemblers, plant workers and managerial staff in Irvine, officials said.
“We’ve been informing our employees since Thanksgiving that our parent company intended to do this,” Krachun said. “The good news is that the economy’s good in Orange County.”
Sorin Biomedical has about 290 employees, including 18 who work in field offices as sales representatives or equipment technicians. Two employees have agreed to relocate to stay with the reconstituted company. Another 25 may follow, Krachun estimated.
Employees will receive severance pay of two weeks’ salary for each year of service. The minimum payment will be four weeks’ salary. The company also will hold a job fair and provide outplacement services, Krachun said.
Some staff members have worked at the Irvine site for 20 years, long before Sorin owned the company, Krachun said.
Sorin took over most of Shiley Inc.’s operation in 1992, when it acquired its line of heart valves, blood transfusion devices and blood oxygenators.
About 200 employees were laid off in the reorganization after that deal.
Defective Shiley heart valves sold between 1979 and 1986 were the subject of a series of class-action lawsuits. Struts that held the valves together fractured in about 450 patients, resulting in about 300 deaths.
Pfizer Inc., Shiley’s parent company, retained responsibility for legal claims arising from valve problems after Shiley’s sale to Sorin. Pfizer has put aside $500 million for up to 41,000 claimants and expects to pay out $165 million by 2005.
Combined, Sorin and COBE will have annual sales exceeding $500 million and will supply about 40% of the world’s disposable cardiopulmonary equipment, executives said.
