Sponsorship Link
NEW YORK (Reuters) - Johnson & Johnson Chief Executive William Weldon will step down from his post in April after a series of recalls called into question the quality of the healthcare giant's products, from artificial hips to infant Tylenol.
/
Related Articles
Search Senior Housing Facilities
Create a personal senior housing list with our search. Search Nursing Homes to find U.S. News-rated facilities. For other types of senior housing, you can access Seniors for Living's list of thousands of additional facilities.
Enter location
| or |
Selecting housing type
Weldon, 63, will remain chairman, the company said on Tuesday. He has held both roles for nearly 10 years, after three decades spent working his way through the company from his first job as a sales representative at J&J's McNeil consumer division.
Vice Chairman Alex Gorsky, 51, will become CEO at the next board meeting on April 26, making him the ninth person to lead the company since J&J's founding in 1886.
Under Weldon's tenure, J&J expanded a sprawling business comprising more than 250 companies, from prescription drugmakers to a medical devices division and units that make personal care products.
J&J shares are up less than 2 percent since Weldon took over a decade ago, but have recovered about 14 percent since August 2010 when the company was mired in product recalls.
Must Read
Follow us
In the past two years, the company that long prided itself on a credo of high quality has seen its reputation tarnished by massive recalls for products that were poorly manufactured or failed at a higher-than-expected rate.
"Gorsky is inheriting a company with a better pharmaceutical pipeline than it had 5 or 6 years ago," Morgan, Keegan & Co analyst Jan Wald said. "He is inheriting a consumer division that's still embroiled in problems and he is getting a medical device business that he needs to refresh and restructure and get it to grow again."
"He's got a lot of work to do and it is going to be very hard to affect anything in the short-term," Wald said.
The quality control problems at J&J's McNeil consumer healthcare unit -- which makes over-the-counter medicines like painkillers Tylenol and Motrin -- were deemed so pervasive that U.S. health regulators took over supervision of three manufacturing plants in March.
Under a consent decree that the McNeil unit was forced to enter into, the U.S. government will oversee those errant plants for at least five years, an independent expert was retained to inspect manufacturing facilities and the U.S. Food and Drug Administration can levy fines up to $10 million annually if it feels the agreement has been violated.
The consumer products recalls cost the company nearly $1 billion in 2010 sales.
Last month, the company said it would take a $3 billion charge, mostly to cover costs for its recall of metal artificial hips by its DePuy Orthopedics unit. The company also had to recall contact lenses, heart devices, such as stents, and insulin pump cartridges.
The latest trouble came just last Friday, when J&J recalled the entire U.S. supply -- 574,000 bottles -- of its infant Tylenol soon after the product had returned to pharmacy shelves.
Weldon was called before Congress in late 2010 to address the recalls, including an incident in which J&J hired contractors to pose as customers and buy defective bottles of Motrin at drugstores rather than alert the general public.
