The Phillips-Medisize factory in Hudson, Wisconsin, was forced to lay off workers last month due to a slowdown in work from electronic cigarette manufacturer Juul Labs, just as the factory was in the process of hiring.
The FDA's decision regarding electronic cigarettes in June has resulted in Phillips-Medisize, a medical device manufacturer in Hudson, Wisconsin, having to lay off employees.
In July, the company notified Wisconsin that it will be laying off 96 employees at its St. Croix Meadows factory in Hudson.
Phillips-Medisize stated in a letter to the state that "a major customer of Phillips recently notified the company that they will need to significantly decrease their production volume at the St. Croix Meadows Phillips factory immediately.”
A spokesperson for Juul Labs confirmed that the company referred to in the letter. The Washington D.C.-based company had previously acknowledged its contract with Phillips-Medisize to manufacture components for electronic cigarettes.
In June, the FDA ordered Juul to cease sales of its e-cigarettes in the United States.
A spokesperson for Juul stated that the FDA's initial decision in June to deny the company marketing orders has caused some uncertainty and ultimately impacted the work of partner facilities.
Phillips-Medisize has issued a Worker Adjustment and Retraining Notification (WARN) letter to employees in the state, indicating that layoffs will commence "on or around July 12.
Phillips-Medisize stated in a release that the 64 affected employees have been reassigned to other positions within the company. All terminated employees were given jobs in different shifts or locations.
According to the company statement, "The company has provided direct support for our employees, including severance pay and opportunities to apply for positions at other locations in Wisconsin, including New Richmond and Menomonie.
Phillips-Medisize employs approximately 2,300 individuals across several locations in Wisconsin. Roughly 200 people work at the Hudson construction site.
The company's warning letter indicated that an additional 225 employees may face layoffs if "our customers notify us that they need a complete halt to production." Phillips-Medisize produces electronic cigarette components at three locations.
In recent years, the once-booming electronic cigarette industry has been subject to regulatory easing. From the end of 2019 to the end of 2020, Juul laid off approximately 75% of its employees.
In July, the FDA temporarily halted the ban on Juul while the company appealed the decision.
A spokesperson for Juul Labs stated that the company believes it should be authorized to sell its products once the FDA completes a comprehensive review of all the science and evidence provided, in accordance with legal requirements and without political pressure.
Phillips-Medisize primarily engages in the manufacturing of drug delivery systems, medical equipment, and diagnostic products. It also produces products for the automotive, consumer, and defense markets.
Phillips-Medisize completed a $63 million expansion project in Hudson in 2020, constructing a new state-of-the-art building covering 285,000 square feet. Upon opening, the company aims to employ 250 workers at the facility.
Representatives from Hudson City did not respond to requests for comment via phone.
Phillips-Medisize was founded in Phillips, Wisconsin in the 1960s. Today, it is a global enterprise with numerous branches in Europe and Asia. In 2017, the electronic company Molex, based in Illinois, acquired Phillips-Medisize. Molex is owned by the business conglomerate Koch Industries, headquartered in Kansas.
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