Merck averts day in court over Dutch plant closure

Merck & Co has postponed the planned closure of the former Organon facility in Oss, the Netherlands, after weeks of demonstrations and the threat of industrial action by workers.

The drugmaker, which operates as MSD in Europe, said it will now consider other alternatives, including a sale of the facility. Reports in the Dutch financial press suggest that some parties have already expressed an interest in acquiring the site, including a Japanese company and two private equity-backed concerns.

MSD announced the reprieve just ahead of a court hearing late last week at which staff hoped to show that Merck had contravened Dutch employment law in its handling of the closure. Among the complaints are that the company failed to follow the correct procedure and give workers at the plant an opportunity to negotiate ahead of the closure announcement.

Oss was one of a number of facilities worldwide - and three in the Netherlands - affected by sweeping job cuts announced by Merck in July. Around 2,175 jobs out of a total Organon workforce of 4,500 are due to be terminated, split roughly half and half between production and R&D staff.

Workers at the site - originally set up by Organon, which was taken over by Schering-Plough in 2007 and came under MSD's control in 2009 - have taken to the streets on a number of occasions in recent weeks to protest the closure.

All told, the company intends to shut 16 facilities worldwide and cut more than 16,000 jobs in a bid to save around $3.5 billion a year from 2012.

MSD has now set back the proposed closure date to December 31 after what appears to be a mobilisation of support for the facility staff among the Dutch government and public. It remains to be seen however whether the staff have merely achieved a stay of execution.

"If there is no solution acceptable to all parties reached by December 31, 2010, the parties will return to their original legal positions," said MSD in a press statement.

Phil Taylor