More JNJ problems... FDA takes over 3 plants

[CONeal]

Two of the plants are still operational.

 

http://money.cnn.com/2011/03/10/news/companies/johnson_mcneil_fda_action/index.htm?hpt=T1

[Parsad]

You know what's pissing me off?  That the haven't fired anyone yet on the McNeil side.  Someone has to be held accountable.  If it isn't the CEO of JNJ, then he better fire someone that is directly responsible!  Cheers!

[Liberty]

That's terrible, but I can't help but wonder if it could turn into a good buying opportunity (especially for WEB, who has billions to invest) if it's a fixable problem and there's not too much permanent damage to the brand..

[CONeal]

It's a fixable problem... stop cutting corners and shut down the plants till the problems are fixed.  It might cost you a few quarters in revenue but in the end people would be more comfortable buying JNJ brands.  These issues that keep popping up is tarnishing the JNJ image and brand.

 

In my view when a drug company manufacturing process comes into question you have to over compensate in order to correct the issue.  It makes consumers more comfortable when a company is going the extra mile to make sure that tylenol you give your kid is safe.  JNJ is not sending out that warm cozy feeling when issues keep popping up.

 

 

 

[Parsad]

Exactly CONeal!  You shut it down, take the hit and make sure it never happens again.  Not issue one recall after another for a year.  I think that's why I'm personally leaning towards the idea that JNJ's CEO should be fired by the board.  Cheers!

[Viking]

Is this an industry wide issue? TEVA has also had similar issues.

[Parsad]

I think it's generally an issue for any business, but it's a bigger issue when it has to do with food, medicine, water quality, etc.  In this case, you tear the division apart, find the problem, who was responsible for oversight, rectify the issue, and promise your customers that you have learned from the error and it will never happen again.  Cheers!

[biaggio]

JNJ appears to have had more than their share of these events over the last couple years.

 

I am surprised (and disappointed) that there has been virtually no effect on the stock price.

[S2S]

^ In an absolute sense, yes. But if you compare recent stock price performance to most indices under the sun, JNJ has lagged. Sometimes by a lot.

 

I wish people stop treating JNJ as a buy-and-forget-because-I-don't-understand-healthcare-nor-do-I-care-to investment, a healthcare mutual fund. Then we'd have some real price movements and buying opportunities.

 

Is this an industry wide issue? TEVA has also had similar issues.

 

Not to the extent JNJ has been suffering from. WSJ Health Blog (http://blogs.wsj.com/health/) for example, has a regular feature named "J&J Recall Watch".

[biaggio]

J&J CEO's Total Pay Falls 7%

 

http://online.wsj.com/article/SB10001424052748703899704576204633314372972.html

 

"Mr. Weldon's total compensation was valued at $28.7 million for 2010 versus $30.8 million for 2009, according to J&J's proxy statement filed ..."

 

Does this not sound excessive considering all the problems noted above?

[DCG]

$28 million for a guy that has turned one of the greatest companies in the world into a trainwreck. That makes sense.

[CONeal]

After the recall today they need to close up shop and try their hand at another business.  I will be writing a consumer letter to the board, although not sure if it will do any good.