When the Titanic set sail, it was the most luxurious flagship in the world. Its designers boasted that it could never sink. Many scholars have concluded that had the captain chosen at that fateful moment to collide head on with the iceberg instead of turning the wheel full tilt, the ship would have survived. The ship had been constructed to take a blow to the bow. The sharp turn tore the ship's wall, causing it to plunge into the depths.
Here in Israel, Teva, the flagship of Israeli industry, has undergone a hostile takeover. The community of socialists decided to run it. Histadrut Chairman Ofer Eini met with the CEO and took his keys. "You will not lay anyone off," Opposition Leader MK Shelly Yachimovich shouted at Teva CEO Jeremy Levin from the Knesset podium. Fire and brimstone. Laying off a few hundred employees in Israel is the end of the world as we know it? And what will happen now? We all know how the story of the Titanic ends.
In Teva's case, it has yet to hit the iceberg, but its maneuvering room is shrinking. Levin's sudden departure from the CEO's chair is because Teva was not allowed to increase efficiency and to maintain its profits in the coming years. Because of that same iceberg, we may have to deal with the sinking of our industry's great ship. Thanks to the calls for justice, we may all get hurt.
Teva's iceberg can be seen on the horizon, and this time it is the expiration of Copaxone's patent. Teva's previous management, under Shlomo Yanai, failed to find a suitable replacement. It continued to purchase huge companies. Some of the acquisitions were apparently unsuccessful. Teva was also forced to pay huge sums in damages earlier this year as the result of a legal battle.
The time of enchantment is over, and the company must prepare for a long winter. Finding a replacement for Copaxone will take years. And if the management flinches at the field trial it is getting from social justice types, its own employees will be the ones begging for handouts in the near future.
What's the solution? It's simple. We need to let Teva manage itself and do as it pleases. Because allowing elected officials, labor unions and the like dictate its future will mean not just the layoff of hundreds of Israeli employees, but rather thousands down the line.