Panasonic Corp., Japan’s biggest home appliance maker, is cutting about 17,000 jobs worldwide over two years as its losses swell from restructuring costs and damage from the March 11 disasters.
President Fumio Ohtsubo said the company will streamline operations to boost profitability, including selling some of its businesses, and reduce its nearly 367,000 workers to 350,000 by the fiscal year ending March 2013.
Like other Japanese electronics makers including archrival Sony Corp., Panasonic has been struggling against competition from newcomers and formidable players from South Korea like Samsung Electronics Co., the world leader in flat-panel TVs. Panasonic has been steadily trimming its workforce to reduce costs. About a year ago it had 385,000 workers.
Osaka-based Panasonic reported a 40.7 billion yen ($499 million) loss for the January-March quarter on Thursday. The loss was largely due to 61 billion yen ($748 million) in restructuring costs, it said. Panasonic had reported an 8.89 billion yen loss for the same period the previous year.
The maker of Viera flat-panel TVs and Lumix digital cameras said its bottom line was also hurt by the March 11 earthquake and tsunami in northeastern Japan, which stalled production because of parts shortages and curbed consumer spending amid the ensuing nuclear reactor crisis.
Panasonic said it was unable to give forecasts for the fiscal year that began April 1 because it could not yet calculate the full damage from the disasters. It said the disasters shaved 21 billion yen ($258 million) off its operating profit for the fiscal year ended March 31.
Panasonic has been trying to turn itself around in recent years by adapting to a global shift toward cheaper gadgets, including new strategies that it is chiseling after adding Japanese battery and solar-panel maker Sanyo Electric Co. as a subsidiary.
Sanyo’s strength lies in cheaper home appliances as well as in solar-panel and battery businesses, which are expected to benefit from greater consumer enthusiasm for “green” energy-efficient technologies.
Ohtsubo said the businesses will be unified under the Panasonic brand, targeting 9.4 trillion yen ($115 billion) in sales for the fiscal year through March 2013.
Panasonic hopes to be No. 1 in the world in lithium-ion batteries and among the top global three in solar panels, he said.
A turnaround will come from boosting its flat TV operations, taking advantage of growth in new markets like India and Vietnam, Ohtsubo said.
“There is so much left for us to tackle,” he said from Osaka headquarters via a satellite feed in Tokyo. “We hope to revive our TV business.”
For the three months ended March 31, Panasonic’s global sales dipped 7 percent on-year to 2.04 trillion yen ($25 billion).
For the fiscal year, it reported a 74 billion yen profit ($908 million), a reversal from the 103.5 billion yen loss for the previous fiscal year.
A strong yen also hurt Panasonic, slashing fiscal year operating profit by 43.9 billion yen ($539 million). A strong yen hurts Japanese exporters by eroding the value of their overseas earnings.
(This version CORRECTS jobs cuts figure to 17,000.)
On a good day, Tiffany Ivanovsky walks out of the grocery store with shopping bags full of food, having saved 80% to 90% of the bill.
No, she’s not a shoplifter, she’s one of a growing number of extreme couponers who treat saving like a competitive sport. And there are big scores: Ivanovsky recently got $1,100 worth of groceries at Kroger for just $40.
"It feels good to save that kind of money," she said.
Ivanovsky often gets food for free or even makes money on purchases. To do that, she uses multiple coupons or stacks manufacturer coupons on top of store coupons to get bigger discounts. And when the coupons actually exceed the value of the item she is buying, she makes money.
At Wal-Mart, for example, if the coupons add up to $2 off of a product that only costs $1.25, then she gets 75 cents credited to her bill.
And in extreme couponing, there are few restrictions on what constitutes fair play. For example, Ivanovsky prints coupons from multiple computers in her house to bypass the limitations per IP address or divides her purchases into multiple transactions.
Some of the more generous policies at stores like Wal-Mart, Dollar General and CVS encourage customers to take advantage of multiple promotions and the rewards programs, despite those that go to extremes.
Other retailers, like Safeway, have policies that prohibit customers from stacking electronic coupons with manufacturers’ coupons — exactly what Ivanovsky does to get her great deals.
"Although it can drive sales up, retailers still want to sell the product at a level of profitability to meet their financial projections," added Daniel Butler, vice president of operations for the National Retail Federation.
"You can do a promotion that drives a lot of people into the store but at the end of the day that’s not good for your customers or the company if a retailer goes out of business because they didn’t manage their promotional money effectively," he added.
To help curb extreme couponing, Coupons.com limits the number of coupons any user can print and embeds important security features to disable reproduction, said Jeanette Pavini, a savings expert with the site.
"Extreme couponing isn’t consumer friendly because it creates out-of stock situations, where consumers cannot purchase products on their list," she said. "And, manufacturers or retailers don’t like empty shelves because no one makes money in that scenario.
But TLC is betting that people will be fascinated by the culture of couponing. The channel is featuring Ivanovsky and others like her on a new series, Extreme Couponing. They devote several hours a day researching how to combine deals and often stockpile their pantries for next to nothing.
"I know sometimes it gets aggressive, but all of those offers are legitimate and they’re out there, that’s fair game," said Brad Wilson, founder of BradsDeals.com, a site that showcases the best daily deals on the web.
Alternatively, consumer savings expert Andrea Woroch says more people need to get on board with the extreme couponing trend to capture the money saving (and making) opportunities.
"It’s a lot of planning ahead but it’s pretty impressive the amount of money that they can save," she said.
Consumers may already be there. Nearly three-quarters, or 72%, of Americans said they plan to off-set rising food prices by incorporating coupons, according to a recent survey by Coupons.com and conducted by Harris Interactive.
Pavini advocates for a tempered approach. "Sign up for a store loyalty card and build your menu around what’s on special, then look for coupons for those items," she said.
"You really can spend 10 minutes doing this and save a considerable amount of money."
A new Toyota Prius these days starts at a list price of $22,410, which might prompt the cost-conscious buyer in this fragile economy to scout around for a used version.
But even a two-year-old model of the hybrid fuel miser costs almost as much, at about $20,800, according to National Automobile Dealers Association.
And don’t expect dealers to come down much on the price of either one.
Blame spiking used-car prices on a shortage of late-model examples in the aftermath of the Great Recession - when few could afford to buy new. The supply of new cars, meanwhile, is tightening as the Japanese earthquake puts crimps in the supply chain, shutting off manufacturing of many models. High gasoline prices, meanwhile, are making buyers hungry for little gas-sippers and hybrids.
The dealers association reports that prices on late-model used cars sold to dealers at wholesale auctions jumped 4 percent in March alone, and they’re up 12 percent over the past year.
Consumers can’t escape the consequences.
“We have to pass it on,” said Denny Marquitz of Marquitz Buick Cadillac GMC in Troy, Mo.
Car shoppers are noticing - to their chagrin.
“On the big car lots, they seem to be asking a lot more than the Kelley Blue Book value,” said Brad Clark of O’Fallon, Mo., who wants to buy a used car for his 17-year-old son.
The price increases are highest among fuel-efficient cars. Prices for these type of cars - which include models such as the Honda Civic, Toyota Corolla and Ford Focus - jumped 11 percent at wholesale auctions last month alone, according to NADA.
The group expects prices to keep rising for months to come.
Used-car prices were rising even before the quake and the recent spike in gasoline prices. A sharp drop in new car sales two years ago is producing a shortage of late-model used cars on the market today, analysts say.
American vehicle sales plunged to 10.4 million as the recession hit bottom in 2009, far below the 16 million-plus level in the years before the slump. They’re now selling at an annualized rate of 13 million.
The “cash for clunkers” program of two years ago sent 677,000 older vehicles to the junk yards as their owners cashed in on a federal subsidy for buying more fuel-efficient cars. Because most of the trade-ins were old, the program probably has only a slight effect on today’s market for late-model cars, the kind prized by both dealers and buyers, said Jonathan Banks, senior analyst for the NADA Used Car Guide. It may be having more impact on prices for cheaper, older cars.
But another new factor has driven up late model prices: Smaller rental car companies have joined the bidding at auto auctions. That’s because manufacturers have cut back on their cheap fleet sales to rental companies, forcing the companies to bid for newer used cars.
The result is the tightest market for used cars in 20 years, said Banks, who thinks the situation will remain tight through next year. Prices for used cars usually rise slightly in the spring, but the March jump was extreme, said Banks.
Auto dealer Marquitz said buyers were facing yet another problem: Lenders, worried that the higher car values are temporary, won’t increase loan amounts to match the recent run-up used-car prices. “The customer has to come up with more money,” said Marquitz.
GAS, QUAKE WOES
Gasoline prices, meanwhile, have jumped 90 cents over the past year to $3.66 in St. Louis, according to the AAA Auto Club of Missouri. That stems from increased demand in a recovering world economy, topped off by nervousness over revolutions in the Middle East.
Pricey gas is sparking renewed demand for smaller, fuel-efficient cars. The Japanese earthquake is adding to the nervousness, analysts say. The speculation among used car dealers goes like this: The Japanese make many fuel-efficient cars, and if their production declines, more buyers will look to used models.
The cost of a used Toyota Prius hybrid jumped 40 percent at auto auctions over the past year - and 15 percent in the last month.
Meanwhile, the disaster in Japan is starting to slow auto production, and not just in Japan. Japanese plants in the U.S. depend on Japanese-made parts. So do the Big Three American automakers, although to a much lesser extent.
“All those parts on ships are in the process of being delivered. But there are no more ships behind them,” said Mike Wall, analyst at IHS Global Insight. Parts shortages will grow worse this month and in May, he said.
The supply disruptions arrived as U.S. auto sales were already staging a nice recovery, with sales up 17 percent in March. General Motors was reducing sales incentives before the quake struck, said Wall. He and other analysts expect that other automakers will do the same.
The result would be less bargaining power for consumers, who will end up paying more.
“As automakers look at fewer vehicles in their supply chain, they’re going to look at their incentives and say,
Billionaire investor Carl Icahn, Dish Network and a group of debtholders are the three remaining bidders for movie-rental chain Blockbuster in an auction Tuesday at U.S. Bankruptcy Court in New York.
The bankruptcy auction will decide the fate of the Dallas movie-rental chain. The auction process was still going on as of 4:30 p.m. ET. At that time, Icahn’s bid of $310.6 million was on top.
Another bidder, SK Telecom, has dropped out. An expected joint bid by two liquidation firms, Gordon Brothers Group and Hilco Merchant Resources, did not materialize.
Though the bidding took place in open court, the process was hardly action-packed. Lawyers, bidders and others took extended breaks over the day to revise their bids and negotiate. Icahn himself made an appearance in court at midday.
The successful buyer or buyers could continue to operate the chain in full or part or liquidate the company, pressing “stop” on the stores that brought movie night to millions of families payday lenders.
When Blockbuster, based in Dallas, filed for bankruptcy protection, it was down to 3,000 stores, less than a third of the peak of 9,100 in 2004. There are about 2,400 currently open with plans to close about 700 more by mid-April.
Icahn was part of the group of debtholders that provided Blockbuster financing to operate while in bankruptcy in September. Everyone in that group except for Icahn, is part of the bidding group of debtholders led by Monarch, called Cobalt Video Holdco LLC.
Blockbuster used to dominate the U.S. movie rental business. But it lost money for years as that business declined because customers shifted to Netflix Inc., video on demand and DVD rental kiosks.
The auction is expected to be complete before a sale approval hearing scheduled for Thursday.
Liberal leader Michael Ignatieff, seeking to make up ground in polls, opened week two of Canada’s election campaign asking voters to choose between more social spending and Conservative Prime Minister Stephen Harper’s tax breaks for businesses.
Ignatieff proposed programs worth C$8.2 billion ($8.5 billion) over two years yesterday, to be paid for by reversing corporate tax cuts implemented by Harper, capping tax deductions for stock options and ending subsidies for energy companies.
The Liberal platform “belongs to everyone because it’s about your family,” Ignatieff, 63, said yesterday in Ottawa. “We can strengthen families, without raising their taxes, if we stop corporate giveaways.” The 94-page document repeated commitments to create early child education spaces, boost benefits for people caring for sick or elderly relatives and establish grants for postsecondary education. Another C$700 million a year would go to seniors living in poverty.
Ignatieff trails Harper by about 10 percentage points in the most recent polls, and his emphasis on social programs is an attempt to win more of the anti-Conservative vote from the other opposition parties and close that gap ahead of the May 2 elections, said Michael Behiels, a history professor at the University of Ottawa.
“When you are seeking power you go on the offense,” Behiels said in a telephone interview.
The New Democratic Party, which also is calling for higher corporate income taxes and more social spending, had 36 seats in the 308-member House of Commons before elections were called. The Liberals held 77 seats, the Conservatives 143 and the Bloc Quebecois 47.
Majority Unclear
Polls suggest the Conservatives would win the most seats in the election, although it isn’t clear if they would win a majority.
The Conservatives were supported by 40.7 percent of decided voters, followed by 29.4 percent who supported the Liberals, according to a CTV/Globe/Nanos election survey published yesterday and taken March 31-April 2. The telephone survey of 1,200 people has a margin of error of plus or minus 2.8 percent.
Ignatieff’s strategy has been to attack Harper for wasting money on new fighter jets and prisons, and neglecting education and health care. The Liberal leader, a former professor at Harvard University in Cambridge, Massachusetts, is also seeking to portray himself as more open and democratic than Harper, aiming to take advantage of a parliamentary finding last month that held the governing Conservatives in “contempt” of the House of Commons for withholding information.
Ignatieff has challenged Harper to a one-on-one debate, on top of the traditional multiparty debates held during Canadian election campaigns. He has also spoken at town hall meetings and done interviews with national media.
Bubble Tour
Ignatieff, who last week regularly took public walks and entered shops to shake hands, has accused Harper of running a tour in a bubble because the Conservative leader limits his press conferences to five questions and relies primarily on scripted campaign events direct payday lenders. At one event in Halifax, Nova Scotia, Harper kept reporters behind a fence about 40 feet away from the podium.
The Conservatives looked at pre-election polls showing they had a lead and “decided to go into a bubble campaign where they take no risks whatsoever, none,” Behiels said.
Harper has said his preference was to have only one debate with Ignatieff alone, without the other leaders, a proposal he says the Liberals rejected. When asked at a press conference last week why his campaign was limiting questions, Harper asked reporters if they had any additional questions to ask.
Corporate Taxes
The central component of the Liberals’ economic platform is to boost revenue by returning the corporate income tax rate back to 18 percent. The country’s corporate tax rate was lowered on Jan. 1 to 16.5 percent from 18 percent, and will fall to 15 percent in 2012 under Canadian law.
Ignatieff’s platform also says the Liberals will shrink Canada’s deficit to 1 percent of gross domestic product within two years if elected.
The Conservatives also continue to draw distinctions between the two leading parties, saying the increase in taxes threaten to drive the economy back into recession.
“They want loads of new spending and they are prepared to finance that through tax increases,” Harper said at a press conference in Ottawa yesterday where he promised to extend tax breaks that promote fitness. “That’s a very different position than our party.”
Won’t Shake Confidence
The Canadian dollar has appreciated 1.2 percent against its U.S. counterpart since the election was called, and the 30-year government bond yield has increased to 3.77 percent from 3.70 percent. The election probably won’t shake “market confidence” Toronto-based Canadian Imperial Bank of Commerce economists Avery Shenfeld and Warren Lovely wrote in a March 31 report.
Harper spent the first week of the campaign announcing measures likely to be popular with families and regions reliant on manufacturing, aiming to bolster his party’s support in suburban ridings around Toronto the conservatives need to gain to win a majority. Those include a pledge to let families with children under 18 split up to C$50,000 of their income for tax purposes, and plans to reintroduce measures in Finance Minister Jim Flaherty’s budget that provide tax breaks for manufacturers and small business owners.
Chinese officials say Volvo Car Corp. plans a manufacturing base in the western Chinese city of Chengdu as it aims for expansion in the world’s biggest auto market following its buyout by independent automaker Geely.
An official with the city’s Automotive Industry Investment Bureau confirmed a report Tuesday that the Swedish carmaker has chosen Chengdu as a manufacturing base, but would not give further details.
The Volvo factory reportedly will be focused on making compact and economy cars on a large scale. Shanghai and the northern city of Daqing also had been vying for new Volvo factories following the acquisition last year by Geely.
Volvo plans a news conference to announce its strategy in China later this week in Beijing, the Chengdu Overseas Media Service, a local, nongovernmental media group, reported, citing officials from the city’s trade development zone.
Ning Shuyong, a Geely spokesman, would not confirm the report but said a decision was pending.
Chengdu, capital of populous Sichuan province, is among many Chinese cities aspiring to become major automobile manufacturing hubs and is one of the country’s biggest inland markets. While overall sales of autos are forecast to slow slightly from their torrid growth in recent years, sales in the provinces are surging as increasingly affluent families buy their first cars or trade up.
Chinese media reports say the factory in Chengdu is already under construction and is due to begin production by 2013, with an initial capacity of 125,000.
Privately-owned Geely Holding Group agreed in March 2010 to buy Volvo Car from Ford Motor Co. for $1.8 billion, the biggest acquisition by a major Chinese automaker so far.
The buyout gave small but ambitious Geely access to a prestigious brand and top-tier technology and enabled Ford to unload the loss-making automaker to raise cash and focus on its core Ford and Lincoln brands.
Industry analysts have expressed doubts over 13-year-old Geely’s ability to make a success of Volvo, an older, perennially money-losing manufacturer on another continent. Geely, based in the eastern city of Hangzhou, has built a business selling cars, motorcycles and scooters with little government support.
Volvo recently set up a new China headquarters in Shanghai.
Geely has said it plans to keep its production arrangements in Europe and contracts for assembling 15,000 cars a year by a Ford joint venture, Changan Ford Mazda Automobile Co., in Chongqing. The longest of those contracts runs until 2018.
The Swedish automaker sold 22,400 vehicles in China in 2009, up 80 percent from the year before, but has trailed behind rivals like BMW and Audi.
Israel’s prime minister on Sunday accused Iran of trying to exploit the recent instability in Egypt by sending two warships through the Suez Canal into the Mediterranean, saying he views the move “with gravity.”
The Iranian ships were expected to make a rare crossing through the canal on Sunday or Monday en route to Syria _ an Iranian ally and Israel’s enemy to the north. Egypt confirmed the ships would be allowed through the strategic passage.
“Israel views this Iranian step with gravity,” Benjamin Netanyahu told the weekly meeting of his Cabinet. He did not suggest there would be an Israeli response. The ships would not enter Israeli territorial waters.
Protests in Egypt toppled the country’s autocratic ruler, Hosni Mubarak, on Feb. 11 and Egypt is currently being run by the military. Israel has expressed concern that Islamic groups could increase their clout in Egypt and harm the three-decade-old peace agreement between the two countries.
Egypt, a longtime U.S. ally, has been at odds with Iran for decades, and Israel fears a weakening of Egypt could give Iran room to increase its reach. The Gaza Strip, sandwiched between Israel and Egypt, is ruled by the Iranian-backed Hamas militant group.
“I think we see today what kind of unstable area we live in _ an area where Iran is trying to exploit the situation that’s been created to try to expand its influence by sending two warships through the Suez Canal,” Netanyahu said payday advance.
Last week, Suez Canal officials identified the two Iranian vessels as the Alvand, a frigate, and the Kharq, a supply ship. Canal authorities can deny passage only if they decide ships pose a safety risk.
Israeli warships have traversed the canal in the past, and in at least one case, an Israeli Dolphin-class submarine also passed through in what appeared to be a message to Iran. Some foreign media reports say that Dolphins can fire nuclear-tipped cruise missiles.
Israel considers Iran an existential threat because of its nuclear program, calls for Israel’s destruction and support for Hamas and Hezbollah guerrillas in Lebanon along Israel’s northern border.
Israel, the U.S. and other countries have pressed for international sanctions to stop Iran from developing nuclear weapons, but both Israel and the U.S. have not ruled out a military strike if sanctions fail.
Iran says its nuclear program aims only to produce electricity.
Shoppers can expect some higher prices as the makers of toothpaste, soap and other everyday household products see their profit margins pinched by rising ingredient costs.
Both Procter & Gamble Co. and rival Colgate-Palmolive Co. reported lower profits Thursday and posted revenue below expectations for the last quarter. They both said commodity costs were rising more than expected. P&G said it was adding $1 billion in costs for the year, double what it anticipated.
P&G, which counts Pampers diapers, Gillette shavers and Crest toothpaste among its brands, said fast-rising costs for materials and fuel would probably mean some price increases, with hikes already planned for its Duracell batteries in March.
Colgate-Palmolive President and CEO Ian Cook said the price increases would run 1 to 2 percent and be “appropriate.”
Consumers can expect to see not only household product makers, but beverage, food and other companies try to pass along increases, said Jack Russo, an Edward Jones analyst. That will test whether they are feeling confident enough about the economy to pay higher prices again for their favorite brands.
“That’s the million-dollar question,” Russo said, adding that P&G and Colgate were better positioned than many because of their solid reputations and relationships with retailers, and presences in emerging markets that are growing more quickly than sluggish developed countries.
However, while some consumers are willing to pay more for whiter teeth or a clean shave, they still appear to be drawn to lower prices for other everyday items. P&G reported ’strong growth” for Charmin Basic, a lower-priced version of its toilet paper brand.
S&P analyst Tom Graves cut Colgate stock from a “Hold” to a “Sell” recommendation, citing the sales shortfall and “a challenging commodity cost environment.” And S&P lowered P&G from “Buy” to “Hold.”
The Dow Jones industrial average broke through 12,000 for the first time in two and half years Wednesday but edged lower in afternoon trading.
Investors were encouraged by President Barack Obama’s call to overhaul taxes on businesses and a jump in new home sales in December. The gains were held back by weak profit forecasts from Boeing Co., Xerox Corp. and other big names.
Obama said in his State of the Union address late Tuesday that he wanted to close corporate tax loopholes and use the additional revenue to lower tax rates on businesses for the first time in 25 years.
That change would be popular with business leaders from both political parties. The U.S. has some of the highest corporate tax rates in the industrialized world.
“If he can take steps to simplify the tax codes, be it for individuals or corporations, I think it would be a lot easier to do business,” said Jack Ablin, chief investment officer at Harris Private Bank.
The Dow Jones industrial average rose 7, or 0.1 percent, to 11,984 in afternoon trading. It went as high as 12,020 earlier. The last time the Dow traded above or closed above 12,000 was in June 2008.
Boeing was the worst performer of the 30 stocks in the Dow average. Boeing fell 3.3 percent after saying its 2011 profit would be hurt by delays to its new 787 aircraft and higher pension expenses.
Xerox fell 8 percent. The company issued a weak earnings forecast and said its longtime chief financial officer, Lawrence A. Zimmerman, was retiring.
Eastman Kodak Co. fell 8.2 percent. The company’s income fell 95 percent on weaker revenue from its camera business and lower royalties from digital imaging.
The Standard & Poor’s 500 index rose 7, or 0.6 percent, to 1,298. The last time the S&P index closed above 1,300 was Aug. 28, 2008.
The Nasdaq composite index rose 22, or 0.8 percent, to 2,742.
The Commerce Department reported that new home purchases rose 17.5 percent in December compared with November. Despite the strong one-month jump, new home sales for all of 2010 fell to the lowest level on records going back 47 years.
Bond prices fell, sending their yields higher. The yield on the 10-year Treasury note rose to 3.40 percent from 3.34 percent late Tuesday.
Later in the day, the Federal Reserve will release a statement from its latest policy meeting. It’s not expected to announce any changes to interest rates or the Fed’s $600 billion bond-buying program.
Oregon has sued Johnson & Johnson for allegedly selling defective Motrin drugs to consumers in the state for more than a year, and for trying to secretly remove the faulty drugs from stores.
"Companies that break the rules and put consumers at risk will be held accountable," Oregon Attorney General John Kroger said in a statement.
The state filed the lawsuit Wednesday against J&J (JNJ, Fortune 500) and its two subsidiaries, McNeil PPC Inc. and McNeil Healthcare Inc. The company’s McNeil division makes over-the-counter cold and pain drugs such as Tylenol, Motrin and Benadryl.
The suit claims that J&J discovered in late 2008 that some supplies of Motrin sold in gas stations and convenience stores nationwide were defective because they were not properly dissolving.
Instead of issuing a public recall of the defective Motrin products, the suit alleges that J&J hired contractors to go into stores in early 2009 and secretly buy the faulty products without telling wholesalers, retailers or consumers about the problem.
Food and Drug Administration officials learned of this "phantom" Motrin recall mid-2009, but the suit alleges that J&J’s McNeil division did not publicly announce a recall until February 2010.
The public first learned of the phantom recall when details of it emerged in June during a Congressional hearing addressing a series of other Johnson & Johnson recalls. That’s when company executives as well as the FDA were questioned about an attempt to surreptitiously take Motrin off the shelves.
After months of maintaining that the company did not engage in any deceptive practices in the Motrin recall, J&J CEO William Weldon finally admitted to lawmakers in December that J&J secretly bought up defective drugs without informing regulators and consumers of its actions.
The Oregon lawsuit said that despite the secret Motrin removal, more than 787 eight-count containers of the allegedly defective Motrin remained in stores for sale in the state.
Additionally, the lawsuit alleges J&J’s activities reflected multiple violations of Oregon’s Unlawful Trade Practices Act (UTPA), which prohibits companies from "employing unconscionable tactics, making certain false or misleading representations, or failing to disclose a fact."
The state is suing J&J for civil penalties of up to $25,000 for each violation of the UTPA, which could amount to millions of dollars.
Oregon Attorney General’s spokesman Tony Green said the state had offered a proposed settlement to J&J prior to the lawsuit, which included a payment of $725,000 by J&J to the Justice Department to settle the dispute.
Green said J&J rejected the settlement offer which then resulted in the suit.
McNeil said in a statement that the company’s actions with regard to the Motrin removal were "consistent with applicable law and there was no health or safety risk to consumers associated with this limited recall."
"As there is no legal basis for the claims advanced by Oregon, we intend to seek dismissal of the Complaint," the company said.
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