Bloomberg News

Sanofi Confirms Plan to Leave Toulouse Research Site

July 12, 2012

Sanofi (SAN), France’s biggest drugmaker, told employees it will proceed with plans to end research operations in Toulouse, on the same day PSA Peugeot Citroen (UG) said it would shut its first car factory in the country in 20 years.

Elias Zerhouni, Sanofi’s global head of research and development, today met with about 50 employees from Toulouse, a city in southwestern France, to discuss the plan, Marc Bianciotto, one of the workers who attended the meeting, said today in an interview in Chilly-Mazarin, close to Paris. Zerhouni reiterated that Sanofi is keeping all options open for disposing of the Toulouse site, Bianciotto said.

“He didn’t say much, and this is just adding to our frustration,” said Bianciotto, 39, a researcher who has been working at Sanofi for 11 years.

President’s Francois Hollande’s Socialist government is facing a wave of job cuts among French companies that are suffering from the economic crisis. Peugeot, Europe’s second- biggest carmaker, plans to cut a total of 14,000 jobs, 8,000 more than previously announced, and stop production at its 39- year-old factory in Aulnay, on the outskirts of Paris.

Sanofi managers told union representatives last week they planned to end research in Toulouse, where the blood thinner Plavix was developed, and in Montpellier, another historical site for Sanofi’s research. The closures put 800 jobs at risk, Thierry Bodin, a CGT labor union delegate, told reporters on July 5. Sanofi also will cut support functions and jobs at its Pasteur vaccine division, Bodin said.

Job Losses

The measures may lead to as many as 2,500 job losses in France, Jean-Francois Chavance, a CFDT labor union representative, said in a July 9 telephone interview. This would be in addition to about 4,000 cuts in Sanofi’s home country over the past three years, he said.

“Sanofi showed up at the ministry to tell us they were planning several thousand job cuts,” French Productive Recovery Minister Arnaud Montebourg told senators today, according to Le Nouvel Observateur’s website. “Couldn’t you have said that earlier on? Last year you made 5 billion euros ($6.1 billion) in profits,” Montebourg said, according to the newspaper.

Sanofi is seeking to reorganize its French operations as part of a wider, 2 billion euro cost-cutting plan announced in September. Chief Executive Officer Chris Viehbacher began redesigning Sanofi’s research soon after taking over in 2008. The 52-year-old CEO accelerated the overhaul after last year’s $20.1 billion takeover of Genzyme Corp., the world’s biggest maker of treatments for rare genetic diseases, by creating so- called research hubs and shutting down a site in Bridgewater, New Jersey, which employed about 1,000 people.

Toulouse Employees

Zerhouni spent one hour with the Toulouse employees who traveled to Chilly-Mazarin, where managers were due to meet workers’ representatives, Laurence Bollack, a spokeswoman for Sanofi, said in a telephone interview today.

The discussions with Zerhouni were “open, frank and constructive,” she said.

Eight of the 50 workers spoke to Zerhouni to defend the Toulouse site, according to Laurence Millet, a Sud Chimie union representative who was present at the meeting.

“We were very tense,” Millet said in an interview. “I burst out crying while I was speaking to him. I couldn’t help myself. Someone told me it’s probably good he sees the state we are in, but I wish I hadn’t.”

Sanofi set up an internal team to analyze the different possible options for the Toulouse site, Bollack said.

Sanofi workers in Toulouse, Chilly-Mazarin and Montpellier were on strike to protest the planned job cuts today.

“I remain very vigilant on the decisions that will be made on the future of the Toulouse research site and the jobs there,” Pierre Cohen, the mayor of the city of Toulouse said in a July 10 e-mailed statement, following a meeting with Viehbacher, Zerhouni and Christian Lajoux, the head of Sanofi France.

To contact the reporter on this story: Albertina Torsoli in Paris at atorsoli@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net


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