Devices & Diagnostics

Does Medtronic have a responsibility to the health of Minnesota workers?

Earlier this week, Cretex union concrete laborers took their strike to the Minnesota State Fair. There, they again asked Minnesotans to appeal to the state’s famous medical devices giant Medtronic (MDT). Laborers Local 563 has had regular presence outside Medtronic’s headquarters, addressed CEO Omar Ishrak and shareholders at the company’s annual meeting and placed a […]

Earlier this week, Cretex union concrete laborers took their strike to the Minnesota State Fair. There, they again asked Minnesotans to appeal to the state’s famous medical devices giant Medtronic (MDT).

Laborers Local 563 has had regular presence outside Medtronic’s headquarters, addressed CEO Omar Ishrak and shareholders at the company’s annual meeting and placed a “Stand Up for Families” digital billboard to glow about a mile away from it all.

Why? Cretex is a Minnesota contract manufacturer that supplies Medtronic. For medtech companies, Cretex makes implantables, non implantables and durables in neuromodulation, ablation, endoscopic and cardio spaces, to name a few. But it also manufactures concrete, among other products. And Cretex is eliminating workers’ pension contributions. Laborers Local 563 claims this could affect some workers’ retirement packages by as much as 80 percent.

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The average hourly wage for a laborer at Cretex is $19.26 an hour for about nine months of the year. (Concrete isn’t produced at the facility during the winter months.)

“Medtronic is not only a well-respected company but also one of Cretex’s most important customers: if Medtronic talks, we’re confident that Cretex management will listen,” Tim Mackey, business manager for Local 563, said.

Cretex VP and CFO Steven J. Ragaller told Plastics Today, that as of last year, the medical market accounted for more than half of company sales.

“We plan to grow our medical plastics business significantly in 2013–at a double-digit rate,” Ragaller said in the same December 2012 interview.

On the one hand, Cretex appears (and very likely may be) greedy at the expense of its workers. On the other, pensions are a thing of the past. Many companies are figuring out ways to phase them out, and Cretex is just following that trend.

But for the eight workers who’ve been there less than five years–the amount of time it takes to be vested, they’ll lose everything they’ve contributed, Local Laborers 563 business agent Steve Buck said.

Buck said Cretex was unwilling to bend or compromise or discuss other options with the union.

“There were no other offers made,” he said.

The workers’ appeal to Medtronic is smart. Mackey is right. If one of Cretex’s biggest customers spoke up, Cretex would listen.

Yet for now, the company plans to remain silent.

“Medtronic does not engage in internal labor disputes of other companies. We encourage both sides of the dispute to continue to negotiate in good faith to resolve their differences. The current activities are related to labor practices within a concrete division owned by Cretex Companies. Medtronic does not have any contracts with the concrete company owned by Cretex. We do have supplier contracts with other divisions that are owned by the same parent company as the concrete division,” Cindy Resman, director of public relations and corporate communications at Medtronic, said.

Medtronic did not make this business decision, but the company does promote its own  corporate citizenship mission as contributing to a healthier future, in part by operating “responsibly in all facets where our business intersects with society.”

“If that truly is the way that Medtronic feels, they should expect the same from their suppliers,” Buck said.

As a global company that has big impact on Minnesota’s economic health, what responsibility does it have to people in its home state? What responsibility does it have for how business partners behave?

There is no clear-cut answer, but here are some questions this brings up:

  • Is Medtronic ethically bound to invest more–in dollars or in vocal support–locally?

  • As Medtronic continues to stress being “geographically diverse,” opening its first office in Bangladesh earlier this week, does it still even identify itself as a Minnesota company?

  • Would a Cretex employee be able to afford his share of medical costs in retirement  — such as a knee replacement or a heart stent, or more relevant,  treatment for silicosis —  without his pension?

  • What does Medtronic have to lose by speaking up?

 

Cretex did not respond to a request for an interview about the plan to eliminate pensions.