Saturday, November 12, 2011
Stryker Corporation, which makes implants and instruments for orthopedics and neurosurgery, put out a curious press release Thursday at the close of the market:
Stryker Corporation (NYSE:SYK) announced its intention to implement focused workforce reductions of approximately 5% of its global workforce and other restructuring activities that are anticipated to reduce annual pre-tax operating costs by over $100 million beginning in 2013. The targeted reductions and other restructuring activities are being initiated to provide efficiencies and realign resources in advance of the new Medical Device Excise Tax scheduled to begin in 2013...
Background and commentary
The Medical Device Excise Tax, part of the financing for those parts of Obamacare that increase costs rather than reducing them, will apply to revenues, rather than profits, from sales of medical devices in the United States. The obvious effect of the tax is to discourage new medical technology (because the return hurdles necessary to justify the investment in innovation will have to overcome a steep new tax obligation perhaps years before any actual profit) and to encourage investment abroad rather than here (because the tax applies only to revenues in the United States). Beyond that, the tax will do a lot of damage to the growth of device company profits in 2013, so our industry needs to dig particularly deeply to cut costs so as to maintain profit growth over the next two years. All of this is obvious, and was made plain to the Democrats in the White House and the Congress long before they voted for Obamacare.
Point is, the Democrats knew in advance that their votes would cost jobs and reduce innovation in the medical technology industry. Any who claim otherwise are lying, plainly and simply.
The curious thing about the Stryker release, however, is not the fact of the job cuts, but that the company went out of its way to finger the device tax. Even a year ago, no medical technology company would have dared to risk pissing off the White House, which in 2009 and 2010 had routinely and publicly hammered any large business that did not at least claim to support its healthcare agenda. Now, though, Stryker is naming names. The only reason can be that Barack Obama is so unpopular that formerly beleaguered industries no longer fear his wrath, even if they still labor under his taxation and regulation.
I, for one, take comfort in that.
At least Obama is being consistent. He just finished trashing 20,000 construction jobs and 100,000+ follow-on more permanent jobs by delaying the Keystone XL pipeline to the point that the Canadians are in the process of deciding to build their pipeline to the Canadian west coast and sell their oil to China.
Anon Attorney here.
Even more ironic is the fact that Pat Stryker, granddaughter of the founder of Stryker Medical, is a major Democratic political operative and donor here in Colorado, and was a major Obama supporter.
Now . . . what is that saying about third generation wealth . . .
Had a Republican rammed through legislation that caused this, the MSM headlines would be "Thousands to die over next decade as cold-hearted Republican law decimates medical device industry."
Strange how the inverse has not happened. Bias?
Anon Attorney, nice spot! But not at all surprising. People who inherit their money tend to feel guilty about it, and in any case do not genuinely understand how incredibly hard one has to work to create that kind of wealth.
Oops sorry- Mrs. Stetson is national finance chair for the DNC, and as proud a "save the unions" and "build a large national government" liberal as can be imagined. The fact that she is four generations away from the all the ugly work that went into providing her with the unbelievable wealth she possesses is what makes her so liberal, no doubt.