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[News analysis] Takeda Korea’s merger with Shire has to surmount big hurdle; labor union
  • By Lee Han-soo
  • Published 2019.09.04 17:06
  • Updated 2019.09.04 17:59
  • comments 0

Takeda Korea, which took over Shire Korea in January according to their headquarters’ decision, announced an ambitious business plan in a news conference on Tuesday.

Despite the rosy picture presented by CEO Moon Hee-seok, however, the acquisition is still squeaking as the merged company has failed to find common ground with the labor union, according to unionized workers. “The $63-billion acquisition of Shire has transformed the 237-year-old Takeda into a global top-10 drugmaker, but the merger of their Korean offshoots has more than a few problems,” a union member said.

This is a far cry from Takeda Pharmaceutical’s claims that the company was listening carefully to its employees throughout the merger process, as stressed by CEO Costa Saroukos in a recent news conference.

The biggest issue concerning the merger of Takeda Korea and Shire Korea is how to maintain equal treatment between the employees of the two companies, and this has much to do with the appointment of Moon, former CEO of merged company Shire Korea, as the top manager of the combined company, the unionists said.

The union is claiming the unfair treatment concerns a variety of subjects ranging from wage increase rate to unfair changes in their jobs and roles, and the possible sale of the company’s primary care division. On the other hand, the company emphasized that the merger has been made according to transparent guidelines with no favoritism toward former Shire employees.

As the claims of the two sides are in direct opposition to each other, Takeda Korea's labor union applied for mediation to the National Labor Relations Commission (NLRC) on July 26. However, Takeda’s management failed to propose a compromise plan, and the commission stopped mediating between the two parties.

As the NLRC failed to bring the two parties back to the negotiation table, the labor union plans to hold a vote of members whether to go on strike, later this month. "If members decide to enter into industrial actions, we plan to hold rallies and conduct picketing in front of our headquarters," said Kim Young-book, the union’s leader.

Kim claimed that the unfavorable atmosphere inside the company has caused former Takeda workers to leave the company and seek new jobs, attributing it to the company’s refusal to give proper job titles to some of the employees after the reorganization.

The management denied the allegation, however, adding that no worker had to retire because of the acquisition.

"Most of the employees left the company because of personal reasons such as new job opportunities and career development or starting businesses," a company official told Korea Biomedical Review. "The structure of the integrated organization and the process for selecting executives were conducted transparently following global standards."

The company also denied that the company was shrouded in a negative atmosphere after the merger.

"After the executive appointment in April, the reorganization process was completed by the end of June," the company said. "In early July, the company shared the vision and strategy of new departments through a three-day company-wide kick-off event."

The company and its employees are working toward a singular goal of providing new treatment options and create a healthier life and a better future for patients, the company added.

CEO Moon also stressed that while it is true that coordination took time as it had to integrate two different organizations, the conflict between the union and the company is different from what is known to the public.

"The company plans to reorganize after determining our main business," Moon said in a news conference Tuesday. "We have not yet decided to reduce or increase the number of employees in any of our departments."

However, the union noted that all employees who left were former Takeda Pharmaceutical workers before the merger. "The company needs to ask why only former Takeda Pharmaceutical employees are leaving the company to develop their so-called 'personal career,' while none of the former Shire employees have left," Kim said.

The union also expressed its anger toward the rank system, which is one of the primary sources of dispute between labor and management.

"The company proposed to settle the three-rank systems for Takeda employees with the company giving cakes and bouquets instead of wage increase when the employees get promoted," Kim said. "The union demanded a wage increase for the promotion, but we feel unfairly treated as the company said it would only provide cakes and bouquets instead."

The rank system is something that the union had been talking with the company before the merger and needs consensus from both sides to conclude, Kim added.

Adding on to the incentive issue, Kim stressed a similar conflict is ongoing for a wage increase.

"The company proposed a 2.5 percent annual wage increase last year, while the trade union suggested a 9.8 percent increase," Kim said. "The management recently proposed a 3.1 percent increase, but the company turned around recently but recorded a considerable amount of profits last year." According to Kim, the company used to have a 5 percent-range increase in wages on average.

When asked why the company does not seem to be eager to participate in the negotiation, Kim said the company appears to want the former Takeda employees to leave.

"It was rumored that the company plans to sell its primary care division, which are the core business of Takeda Pharmaceuticals Korea," Kim said. "The division employed 40 percent of the total Takeda workforce, and the union believes that the company wants to reduce the number of employees before selling off the division."

In response to such claims, Takeda Pharmaceutical Korea said that the company does not know anything about the unconfirmed rumors and that it cannot give a specific answer as there is nothing concrete.

With the conflict deepening between the two parties, the union said that it would boycott all official events held by the company and will conduct a strike if the vote passes this month.

"In October, all the union members will go to the company's headquarters in Japan to participate in the general meeting for the company's labor unions," Kim said. "Here, we will inform them of Takeda Pharmaceutical Korea's situation."

As the company's global catchphrase is "We Are The One," the union hopes that the company will become more considerate of its employees, Kim added.

Takeda Pharmaceutical Korea also said that it would do its best to resolve this issue smoothly.

"We are currently in the process of integrating the two companies and a rise in conflicting interest is natural," Moon said. "As Takeda Pharmaceuticals is a company that values patient reputation and trust, I believe that we will successfully conclude the integration by next year and work as one."

The reorganization process, including the selection of executives, is carried out with equity and transparency following the company's global guidelines, Moon added.


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