After several weeks of bad news about employment in the south, employees at the Perrigo Company (NYSE:PRGO; TASE:PRGO) plant in Yeruham finally have some positive news. The employees and Perrigo's management have signed an agreement including a promise that the plant will not be moved away from Yeruham in the next five years.
The agreement follows a period of uncertainty, after Perrigo announced its intention of exiting the prescription drugs sector, which will directly affect employees at the plant in Yeruham.
For the employees, the purpose of the agreement is to bring more work to Israel and also to maintain the activity afterwards. The existing collective labor agreement, which was valid until April 2020, will be extended by two years, during which the company's employees will receive a 4.25% pay hike each year. When the plant is sold (as part of splitting off of Perrigo's prescription drugs business), each company employee who has worked there at least a year will receive a NIS 2,250 gross sale bonus up to a cumulative gross ceiling of NIS 70,000. Another clause in the agreement states that the welfare budget for each employee will be increased by NIS 300 to NIS 3,700, and to NIS 4,000 in the following year.
Perrigo Yeruham workers' committee chairperson Haim Ben Abu told "Globes" today, "Following lengthy, difficult, and exhausting negotiations, we have reached understandings with the company's management. The two sides showed flexibility for the benefit of the workers and the plant. This is a historic day for Yeruham, given the state of employment there, and this is good news for the workers, who will have job security. I thank the Histadrut, which helped us all along the way. We have attained an excellent agreement."
Two other factories in Yeruham were recently in the headlines: the Phoenicia Glass Works bottle factory and the Emilia Cosmetics factory.
Perrigo announced several months ago that it was planning to split off its prescription drug business, which it is planning to accomplish by 2020. It was previously reported that two US funds were interested in acquiring the activity for over $2.5 billion. Perrigo recently announced a new strategy based on switching from healthcare to self care, including disease prevent and other products. The goal is to generate more value and make Perrigo a consumer company, because consumer companies are traded at higher multiples than pharma companies. The plant in Yeruham, which was built in 2016 at an investment of NIS 180 million, currently has 600 employees. Perrigo has been active in Israel since it acquired Israeli company Agis Industries in 2004, long before the Yeruham plant was built.
Published by Globes, Israel business news - en.globes.co.il - on May 21, 2019
© Copyright of Globes Publisher Itonut (1983) Ltd. 2019