Over the past several years, a pharmaceutical industry has quietly gathered increasing momentum in the Milwaukee area. The area’s pharmaceutical industry is in the formative stages, but southeastern Wisconsin has the range and depth of pharmaceutical-related offerings to generate self-sustaining growth.

Some companies in the area, like Cambridge Major Laboratories Inc. in Germantown, make active pharmaceutical ingredients (APIs), the active ingredients in prescription and over-the-counter drugs. API producers operate as contract manufacturers, sending their products to drug companies that combine the API with other ingredients into the final product.

The metro area is also home to several emerging drug companies, dedicated to bringing new drugs to market. These companies have relatively few employees, but are working on next-generation drugs to treat neurological, cardiac and other disorders.

There are also several companies that perform drug safety testing in the Milwaukee area. These companies test new drugs that seek FDA approval in the pre-clinical and human clinical phases of testing.

Despite the recession, most companies within the pharmaceutical industry in the Milwaukee area are growing significantly.

API producers are expanding plants, dramatically increasing sales or acquiring other companies. Drug development companies have signed licensing contracts with universities, such as Marquette and the University of Wisconsin-Milwaukee, and are raising venture capital.

Spaulding Clinical Research in West Bend, a drug testing firm, is already planning to quadruple its size after being open for only one year.

While the three types of companies operate in different niches of the pharmaceutical industry, the significant growth in multiple areas marks the evolution of a self-sustaining pharmaceutical industry in the Milwaukee area, said Carl Sheeley, president and owner of Fontarome Chemical Inc., a St. Francis-based API producer.

“It’s like a nuclear reaction,” he said. “You cannot gain a crucial mass with just a little piece of plutonium. But if you build it up, all of a sudden you’ve got people, IP (intellectual property) and money from the local area.”

To read more, click here.

Permacel to shutter operations in Pleasant Prairie

Permacel, an industrial tape manufacturer owned by Nitto Denko Corp., a Japanese company, told the Wisconsin Department of Workforce Development last week that it will close its Pleasant Prairie operations in late June and early July. All of the 99 employees at the facility will lose their jobs.

Permacel also has operations in Lakewood, New Jersey. The company makes tape for the electrical, electronics, automotive, aerospace and graphic arts markets.

A company official did not return calls seeking additional information.

Watertown company to lay off 55

Western Industries Inc. in Watertown has informed the state that it plans to lay off 55 workers, beginning on June 1 The layoff is considered temporary, but indefinite.

The company said it needs to lay off workers because of revenue declines during the recession. The company previously took cost reducing measures including hour reductions and voluntary short-term employee layoffs, but the company says further cost-cutting steps are necessary.

Rockwell Automation second quarter profit down 72 percent

The affects of the global recession have made a deep cut into the profits of Milwaukee-based Rockwell Automation Inc. The company reported fiscal 2009 second quarter net income of $40.6 million, or 29 cents per share, down 72 percent from $142.8 million, or 96 cents per share, for the second quarter of fiscal 2008.

The company reported second quarter revenue of $1.058 billion, down 25 percent compared to $1.406 billion in the second quarter of fiscal 2008.

“Our second quarter results reflect the severity of the global economic recession," said Keith D. Nosbusch, chairman and chief executive officer. "Market conditions quickly deteriorated across most industries and all regions. With a sharper revenue decline in the quarter than we expected, we continued to aggressively adjust our cost structure. We made significant progress on our cost reduction actions in the quarter and expect to deliver savings for fiscal year 2009 above the original $240 million target. We also generated strong free cash flow in the quarter, primarily through our intense focus on working capital management. I am proud of how well our employees have responded in this challenging environment. Despite making personal sacrifices, they have not wavered in their commitment to our business priorities and dedication to our customers.”

Rockwell now expects its revenue to decline between 16 and 18 percent in fiscal 2009. The company said it is revising its fiscal 2009 earnings guidance downward to a range of $1.40 to $1.70 per share.

“While there are signs that economic and market conditions may be stabilizing, it is still too early to call a bottom," Nosbusch said. "We believe that the steepest sequential declines are behind us, but markets remain uncertain and our revenue trends are mixed across the regions. We are managing our business assuming that sales volume in the second half of the fiscal year will be somewhat below the second quarter run rate. We continue to evolve our cost structure and expect to implement additional cost actions in the remainder of the fiscal year. Given this outlook, we now expect revenue to decline, excluding the effects of currency. Accordingly, we are, excluding any restructuring charges related to actions that we may take in the remainder of the fiscal year. In spite of the difficult business environment, we will balance near-term financial performance with protecting our intellectual capital and core technology investments. Our strong balance sheet and liquidity position provide the financial flexibility needed to manage through this economic cycle without compromising our long-term strategy. We are confident that we will execute through the downturn and emerge even more competitive when markets recover.”

Chrysler enters Chapter 11, Kenosha plant will close in 2010

Auburn Hills, Mich.-based Chrysler LLC filed voluntary petitions late last week under Chapter 11 of the U.S. Bankruptcy Code in U.S. Bankruptcy Court for the Southern District of New York, under the direction of the U.S. Treasury.

It also reached an agreement in principle to establish a global strategic alliance with Fiat SpA to form a new company.

Chrysler said the merger will allow it and Fiat to "fully optimize their respective manufacturing footprints and the global supplier base, while providing each with access to additional markets." Fiat powertrains and components will also be produced at Chrysler manufacturing sites.

"This partnership transforms Chrysler into a vibrant new company with a wealth of strategic advantages," said Bob Nardelli, chairman and CEO of Chrysler. "It enables us to better serve our customers and dealers with a broader and more competitive line-up of environmentally friendly, fuel-efficient high-quality vehicles. Benefits to the new company include access to exciting products that complement our current portfolio, technology cooperation and stronger global distribution."

Chrysler also will file a motion under Section 363 of the Bankruptcy Code requesting the swift approval by the court of the agreement with Fiat and the sale of Chrysler's principal assets to the new company. The company said that move should allow the leaner, new company to emerge in a matter of 30 to 60 days.

As part of the restructuring and with the backing of the U.S. Treasury, Chrysler said it has reached an agreement in principle with GMAC to become the preferred lender for Chrysler dealer and consumer business. GMAC will be able to offer the best long-term finance options for Chrysler dealers and customers with standard rate installment products, the company said.

As a part of the restructuring, most manufacturing operations will be temporarily idled effective today, including its Kenosha engine plant where it has more than 600 employees. Normal production schedules will resume when the transaction is completed, which is anticipated within 30 to 60 days.

The Kenosha plant will also be one of several facilities to close permanently at the end of 2010, according to several media reports.

"To be sure, there will be many changes as we move forward to implement our plans,” Nardelli said. “But today, from many great parts, we begin to build a vibrant new company with less debt, a stronger balance sheet, richer product portfolio, supported by a well-positioned finance company."

GM seeks another $11.6 billion, will eliminate Pontiac, 21,000 employees, 2,600 dealerships and 13 plants

Detroit-based General Motors Corp. recently announced that it needs more money from the government and is planning dramatic reductions to reshape the floundering company.

GM will eliminate the Pontiac brand, cut its dealerships by 42 percent, eliminate 21,000 jobs and close 13 plants.

GM also said it needs to borrow another $11.6 billion from the government or it will have to file for bankruptcy protection. The company has already borrowed $15.4 billion from the federal government, so the company is now seeking a total of $27 billion in loans from the government to help it restructure.

"We are taking tough but necessary actions that are critical to GM's long-term viability," said Fritz Henderson, the company's president and chief executive officer. "Our responsibility is clear – to secure GM's future – and we intend to succeed. At the same time, we also understand the impact these actions will have on our employees, dealers, unions, suppliers, shareholders, bondholders and communities, and we will do whatever we can to mitigate the effects on the extended GM team."

GM said it will eliminate the Pontiac brand by the end of 2010. Going forward, GM said it will focus on four core brands: Chevrolet, Cadillac, Buick and GMC. The four-brand strategy will enable GM to better focus its new product development programs and provide more competitive levels of market support, the company said.

"We have strong new product coming for our four core brands: the Chevrolet Camaro, Equinox, Cruze and Volt; Buick LaCrosse; GMC Terrain; and Cadillac SRX and CTS Sport Wagon and Coupe," said Henderson. "A tighter focus by GM and its dealers will help give these products the capital investment, marketing and advertising support they need to be truly successful."

GM said it will reduce its U.S. dealer count from 6,246 to 3,605 by the end of 2010, a 42 percent reduction.

"This reduction in U.S. dealers will allow for a more competitive dealer network and higher sales effectiveness in all markets," the company said.

GM also said it will reduce U.S. hourly employment from 61,000 to 40,000 in 2010, a 34 percent reduction that will eliminate 21,000 jobs. The company said its hourly employment will level off at about 38,000 in 2011. The company said it also anticipates a further decline in salaried and executive employment.

The reduction in its hourly workforce will reduce hourly labor costs from $7.6 billion to $5 billion in 2010, a 34 percent reduction, the company said.

GM also said it will reduce the number of U.S. manufacturing plants it has from 47 to 34 by the end of 2010. That includes the plant in Janesville, which the company has already closed.

As a result of the cutbacks GM says its structural costs are projected to decline by 25 percent, from $30.8 billion in 2008 to $23.2 billion in 2010.

GM said it will continue to make significant investment in future products and new technologies, with an investment of $5.4 billion in 2009, and investments ranging from $5.3 to $6.7 billion from 2010 to 2014. The company also said that development and testing of the Chevy Volt extended-range electric car remains on track for the start of production by the end of 2010.

"The (company's) Viability Plan reflects the direction of President Obama and the U.S. Treasury that GM should go further and faster on our restructuring," Henderson said. "We appreciate their support and direction. This stronger, leaner business model will enable GM to keep doing what it does best - provide great new cars, trucks and crossovers to our customers, and continue to develop new advanced propulsion technologies that are vital for our country's economy and environment."

Weyco first quarter profit down 51 percent

Shoppers are spending less during this recession and that has resulted in lower profits for

Milwaukee-based Weyco Group Inc., which designs and markets men's dress and casual shoes.

The company recently reported net earnings of $2.5 million, or 22 cents per diluted share, for the first quarter, down from net earnings of $5.1 million, or 43 cents per share, for the first quarter of 2008.

Net sales for the first quarter were $58.9 million, a decrease of 4 percent from 2008 first quarter sales of $61.3 million.

"Our first quarter results reflect the challenges of the current retail environment," said Tom Florsheim, Jr., chairman and chief executive officer of Weyco Group. "Our company continues to be in solid financial shape and we remain focused on building our brands for the long term. We believe we will be well-positioned when economic conditions improve."

On February 23, 2009, the company's board of directors authorized the company to repurchase up to an additional 1 million shares of its common stock under its stock repurchase program, bringing the total available to purchase to approximately 1.5 million shares.

On April 27, the company's board of directors declared a quarterly cash dividend of 15 cents per share to all shareholders, an increase of 7 percent above the previous quarterly dividend rate of 14 cents.

Ladish profit down 80 percent

Cudahy-based Ladish Co. Inc. reported first quarter net income of $1.2 million, or diluted earnings per share of 8 cents, down 80 percent from $6 million, or 41 cents per share, for the first quarter of 2008.

The company also reported 2009 first quarter sales of $105.7 million down from $117.2 million of sales in the first quarter of 2008.

Ladish manufactures highly engineered, technically advanced metal components for the jet engine, aerospace and general industrial markets.

"Ladish results for the first quarter of 2009 reflect the decline in demand in the majority of markets we serve. The $105.7 million of net sales in the period were 9.8 percent lower than 2008 levels due to the production delays at the airframers and a significant slowdown on the industrial portion of our business," said Kerry L. Woody, the company's president and chief executive officer. "Looking forward for the remainder of 2009, we expect our markets to remain challenging as the world economy works its way through the current recession. In response to this challenge, we will continue to drive cost-down actions to stay ahead of the downturn and direct our focus to the available opportunities. During the course of its 104-year history, Ladish has experienced a number of economic downturns and emerged from each one fully positioned to take advantage of the inevitable recovery which follows. We are confident that history will be repeated as we enter the recovery from the current environment."

WMEP’s Manufacturing Matters! Conference will be held Tuesday, May 19 at the Midwest Airlines Center in Milwaukee. The conference will feature numerous workshops on next generation manufacturing and includes keynote speakers Tim Sanders, a consultant to Fortune 500 companies and former chief solutions officer at Yahoo, and Steven Little, a consultant and writer on small business growth. For more information, visit https://manufacturingmatters.org/Default.aspx.

Godfrey & Kahn S.C.’s labor and employment team will present its 20th annual Labor & Employment Law Seminar on Thursday, May 7 from 8:30 a.m. to noon at the Sheraton Milwaukee Brookfield Hotel, 375 S. Moorland Rd., Brookfield. The free seminar will will focus on practical approaches to preventing and managing employment law problems, and provide employers with information concerning recent changes in labor and employment law and suggested strategies to deal with these changes. Please register online at www.gklaw.com.