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Hospira Inc. Message Board

  • just4kicks13922 just4kicks13922 Oct 13, 2005 8:55 PM Flag

    Price Slide

    What's going on - the weakness in price, especially in the face of all the good news is extremely troubling. Is the other shoe getting ready to drop?

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    • Good, because it's a waste.

    • purple paper? you just labelled the site you work in

    • It's not called greed, but if you started with a company 20, 25, 30+ years ago and you were told about the benefits, and one was the pension plan. You look forward to getting that money, because you earned it. The hospital division has the oldest employees, even before the spin off. Here we are in the 21st century, companies take employee pensions, file bankruptcies, reduce benefits to save a buck, and at the same time, the c.e.o., the board, and other top dogs are INCEASING their pay and options. It is unfair that if you put all those years into a company and one day you find out that the grass will not be as green when you retire, I would be upset, too. The 401k isn't safe either. As for as saving money, here are some suggestions. 1. Why purple paper, just because our main color is purple, the paper doesn't have to be purple, white is fine. Purple paper cost more. 2. Why ultra brite paper, regular copy paper is cheaper. 3. Re-cycle more, a lot of waste is still going into the landfill. 4. Reduce overtime more.

    • lib:

      Right on target.

      Furthermore, in this type of action, the burden of proof is on the plaintiff to show that this was a DELIBERATE, CALCULATED, PRE-PLANNED action to effect a desired result that was contrary to ERISA. Unless the plaintiffs have some sort of 'smoking gun' -- e.g. board minutes, internal email, or other demonstrative evidence -- where it can be shown there was an intent to deprive retirees formerly from HPD, the allegation will be very difficult to prove.

      As you correctly point out, the underlying business reasons for the move are clear, and offer exceptional support as to why the action was undertaken. Absent the 'smoking gun', I do not see how the plaintiffs prevail.

    • <<What he can't do according to the ERISA guidelines, is design a scheme to rid ABT of the responsibility to pay retiree benefits. If he/they specifically targeted the HPD division because of the division's advanced employee age and realized that ABT would save billions in pension and healthcare dollars by getting rid of this division, then ABT is going to lose this lawsuit. If Begley was in on the scheme, HSP is going to lose. Betcha..>>

      Island,

      The fact that HPD's gross margin was 20 points lower than ABT's corporate margin probably gives Miles all the cover he needs. If everything was equal and you had a division with a work force at an advanced age, your argument might hold true. But everything was not equal - by a large margin. Miles' ass is covered.

      Lib

    • Look at other large Pharmas that are trying to get into Medical Devices. They are looking for safe drug delivery systems to compliment their existing product lines. Also looking at ABT 3Q earnings...Many Analysts noted that ABT misses the $300 million to the bottom line HPD cash-cow. Either Miles is not thinking like other Pharmas or the 'spin' was a planned attempt to off load future retiree benefits or both...How this impacts the court case or ABT's future earnings is yet to be seen..Maybe HSP will be bought back by ABT, once ABT cuts all of their retiree benefits!!

    • Lib

      <However, the expected returns were not high enough to be compatible with ABT's 50% gross margin. HPD's was in the 30% range. It may be a matter of semantics, but I don't think HPD underperformed. Its business was just not compatible from a gross margin standpoint with ABT's other high margin businesses.>

      This is probably a more true reflection of what happened. They just weren't going to throw any more funds that way than necessary.

      For those who still work there, they should recall the announce about the benefits. The announcement was made that benefits would continue thru the end of the calender year of the spin-off. No comments were made at the time for future years.

      Sometimes it's not was is said , buts what's not.

      As for the long term benefits for the current Abbott retires, I think your right on. Just a matter of time.

      X

    • "Miles was within his rights to spin off HPD and it would really surprise me if the employees win the lawsuit. Wonder how many lawsuits there will be when the inevitible day arrives that ABT does away with it's defined benefit pension plan."

      Abt has a right to end it's defined benefit plan. I doubt that Miles White will lead this elimination. He'll wait for Baxter or Pfizer to do it and he'll follow. It will then be perceived as more "acceptable." Lawsuits won't be won on this elimination alone.

      He can also spin off divisions if they are not as profitable as he'd like.

      What he can't do according to the ERISA guidelines, is design a scheme to rid ABT of the responsibility to pay retiree benefits. If he/they specifically targeted the HPD division because of the division's advanced employee age and realized that ABT would save billions in pension and healthcare dollars by getting rid of this division, then ABT is going to lose this lawsuit. If Begley was in on the scheme, HSP is going to lose. Betcha..

    • <<Bottom line it didn't make the returns expected at that time. Isn't that a valid reason>>

      I don't think that statement is accurate. I think HPD made the returns that were expected, given the fact that there was no investment in that division. However, the expected returns were not high enough to be compatible with ABT's 50% gross margin. HPD's was in the 30% range. It may be a matter of semantics, but I don't think HPD underperformed. Its business was just not compatible from a gross margin standpoint with ABT's other high margin businesses.

      It is interesting to note that HSP is raising its gross margin, despite the additional costs of being an independent company.

      Regardless of the reason, Miles was within his rights to spin off HPD and it would really surprise me if the employees win the lawsuit. Wonder how many lawsuits there will be when the inevitible day arrives that ABT does away with it's defined benefit pension plan. ABT has been feeding that thing to the tune of hundreds of millions because of under performance of investments. They won't tolerate that too much longer. Hundreds of millions don't come that easily in today's healthcare market. You ain't seen nothing yet. Wait until HRC is POTUS. That will probably be the tipping point for ABT's pension program. It will be punishing for its stock too.

      Lib

    • "if abt and hsp did spin off to avoid the retirement benefits.....the $50,000 a year raise in stock options the board just voted in for itself would be another slap in the face to the employees that remained with hsp...i think this would cause a little disgrutlement.... "

      This behavior is unbecoming to say the least! Employees, are you getting the jest of your value, yet?

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