Israel to Demand that Teva Reduce Operations Abroad to Benefit Israeli Workers

Kare Schultz, the Danish business executive who is the new CEO at Teva. (News Oresund)

Teva workers again on Tuesday blocked roads and intersections and conducted demonstrations outside company facilities, as Prime Minister Binyamin Netanyahu was set to meet Teva CEO Kare Schultz. According to reports, Netanyahu will present Schultz with several demands – among them moves that would have Teva give preference to its operations in Israel over its operations in other countries, including Ireland and India.

The demands Netanyahu will present to Schultz were agreed upon at a meeting Monday between representatives of Teva workers and Finance Minister Moshe Kahlon, Economy Minister Eli Cohen, Welfare Minister Chaim Katz, Histadrut labor union head Avi Nissenkorn and head of the Histadrut Leumit, another union, on ways to fight the layoffs.

Workers told the ministers that Teva’s Ireland operations has production facilities similar to those in Israel, which costs the company $10 million less in salary and expenses than the Israeli facility. But given how much the state has given Teva over the years, $10 million is no reason to fire hundreds of Israeli workers while leaving the Irish facility intact.

In addition, the workers told ministers that Teva was planning to open new facilities in India, and asked them to pressure Teva to open the new production line slated for those facilities in Israel instead.

A report in Yediot Acharonot said that the government was prepared to offer Teva new benefits in exchange for committing to leave many of the facilities it planned to close in Israel intact, including its Yerushalayim production facility. Teva, which has benefited from over NIS 22 billion ($6 billion) in grants, tax breaks, and other assistance since 2006, pays between 6 percent and 16 percent in income tax for its Israel facilities. The taxes came on line this year, after Teva was exempted from income tax for a decade.

Itzik Ben-Simon, head of the workers’ committee of Teva’s Yerushalyim plant, has threatened to do “whatever it takes” to ensure that workers don’t lose their jobs. Speaking to Hadashot News, Ben-Simon said that the plant “is a ticking time bomb. We have a lot of explosive and poisonous materials here. The country must be on alert” if something goes wrong. When asked if he was threatening to blow up the plant, Ben-Simon said he was not, but that it was imperative that the plant remain in business.