West To Restructure Tech Group

West Pharmaceutical Services will implement a restructuring plan for its Tech Group segment. The restructuring “addresses the recent reduction in business due to changes in customers’ marketing plans by reducing the operating costs and increasing the manufacturing efficiency of the segment,” according to a West statement. The unit was involved in manufacturing the delivery device for Exubera, a product that Pfizer abandoned in October.

The company will reduce spending throughout the Tech Group segment by consolidating two tool production operations into one facility in Scottsdale, AZ, and by reducing and consolidating other production, engineering and administrative operations in North America. The plan is expected to be completed by December, 2008. As a result of the restructuring, the Tech Group workforce will be reduced by approximately 250 workers, or 13%.

West will incur as much as $12 million in restructuring charges, consisting primarily of severance costs and fixed asset write-downs. The company expects to gain $3 million of cost savings in 2008 and annual operating savings of approximately $7 million from 2009 on.

“These actions, while difficult, are essential to West to create the right operational footprint for the level of business we have today and ensure we remain competitive and financially strong for the future,” said Donald E. Morel, Jr. Ph.D., West’s chairman and chief executive officer. “The restructuring will match the size of our operations to Tech’s forecasted business and allows us to focus our human and financial resources on our strategic goal of expanding Tech’s proprietary product portfolio.”