In this article in The New York Times, Merck CEO hits the mark with this statement:
"This is not an alternative business model, this is not a brave new day," Mr. Evans said. "This is good old-fashioned defense. This is a defensive management of a business in decline."
There are two models toward profitability. The short term one is to fire people and close facilities. Analysts (who don't know anything but spreadsheets) love this. The second one is to build value based on innovation. It takes a strong CEO and board to do this. Evidently Evans and the Merck board are not in this latter category.
Merck, Under Pressure, Will Cut Jobs and Close Plants. Merck said today it would cut 7,000 jobs in the next three years and close five manufacturing plants. The company also hinted at further restructuring. By ALEX BERENSON and VIKAS BAJAJ. [NYT > Business]
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