Boston Scientific CEO: Medical tax will mean job cuts
Published: September 12th, 2011
Sept. 15--Boston Scientific's chief executive yesterday ripped a tax on medical devices slated for 2013 and anticipated major layoffs at the Natick company if the levy -- part of President Obama's health-care overhaul -- isn't repealed.
"It's an outrage. It is soaking one of the last remaining industries in this country that pays (higher-than-average wages)," CEO Ray Elliott said at an industry conference in New York. "We've been very clear: We will have a lot less employees, if somebody tags us with a hundred million dollars worth of taxes."
Elliott's comments came a week after trade group AdvaMed released a study finding that the 2.3 percent federal excise tax would lead to more than 45,000 job losses nationwide -- including nearly 2,700 in Massachusetts, or 11 percent of the state's medical device industry work force. The group predicted a sizable shift of manufacturing overseas.
Boston Scientific is already moving in that direction. In July, the company said it will build a $150 million factory and hire 1,000 workers in China. The announcement disappointed some Massachusetts lawmakers, because Boston Scientific has received millions in tax breaks to expand its local operations.
Elliott dismissed critics of the industry's outsourcing alternative to the tax.
"We're not going to get drawn into a game where somebody starts calling it a test of patriotism, where you move jobs outside the country or cut jobs when a tax is being put in place that taxes innovation," he said. "It's not our job to run the country. Our job's to run this business and produce for shareholders."
Elliott won't be in charge when the tax is scheduled to start. He is set to retire at the end of this year.
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