Lilly: Tippe Labs not affected by cuts

LAFAYETTE, Ind. (WLFI) - Lilly officials announced that 5,500 employees would be cut by the year 2011.
The news was shared with the company's 40,500 workers world-wide Monday morning.

Director of Human Relations and Public Affairs Jade Kas said the announcement should not have much of an affect on the 725 jobs at Tippecanoe Laboratories, near Shadeland.

Senior Vice President of Corporate Affairs and Communications Bart Peterson echoes this sentiment.

"This announcement has nothing to do with the situation at Tippe Labs," said Peterson.

In Indianapolis, Peterson announced that Tippe Labs should not be concerned with the 5,500 jobs that will be phased out globally. But he pointed to last year's challenges.

"We announced, a little over a year ago, that we were in the process of making a decision and we laid out three different possible scenarios with Tippe," said Peterson.

The decision to cut jobs is blamed on an expected loss of revenue from the drug Zyprexa.  Kas said the patent will expire in 2011 and the drug will soon become generic. The patents on drugs Cymbalta and GemZar are set to expire also in the near future.

"You have to kind of feed additional new products into the revenue stream to offset the loss of patent expirations. So, we're looking for ways to do that and one of the ways you can do that if you can't completely compensate for the patent expirations is to continue to reduce your cost structure," said Kas.

Last year's announcement at Tippe Labs was due to financial challenges, one being the GemZar patent expiring.  Kas said the company is still deciding on whether to save money by restructuring the plant, closing it completely or selling to a partner.

"We've had a situation where the products have not been coming in as they once were. So, if we don't have enough volume to fill the tanks, then a partner can come and fill the tanks up for us. It would be a different owner of the site. It wouldn't be Lilly anymore, it would be somebody else," said Kas.

If changes were made at Tippe Labs the town of Shadeland could be affected first. Shadeland Town Council President Jeff Findlay said he was reassured that worker at Tippe Lab would not be affected after a phone call from local plant manager Lawrence McShane. As far as the three options still on the table, Findlay said he hopes that if the company sells the plant, the buyer continues the same operation Lilly had and makes it a seamless transition. He said he hopes that Lilly would never cease operation.

Many people in the Tippecanoe County community depend on the Lilly plant.

United Way Executive Director James Taylor said Lilly is a big part of the organization's campaign.  He said he is pleased to hear that the Tippe Labs will not be affected by the cuts

Greater Lafayette Commerce President and CEO Joe Seaman said Lilly made a bold move that they felt they had to make and he does not anticipate a shut down.

However, Tippecanoe County Commissioner John Knochel said he would not be surprised if Tippe Labs was affected.  He said the number of people being cut is very significant and it appears Lilly is trying to save money like every other entity eveywhere.

Lafayette Mayor Tony Roswarski also weighed in on the announcement.  He said he received a phone call from McShane too.  McShane informed him that there would be no direct impact on Tippe Labs. He future stated that the company has been working on a strategic analysis for more than a year and that they are making great progress. Roswarski said if another company bought Tippe Labs, that would still be good for the community. However, he said if the facility closed it would have a significant impact on community.