NEWS OF THE WEEK
INDUSTRY HAILS U.S.-KOREA DEAL INTERNATIONAL TRADE: Chemical
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HEMICAL MANUFACTURERS are welcoming a
revised free trade agreement the White House has struck with South Korea, saying the deal’s market-access provisions will help increase U.S. exports and create thousands of jobs. “This significant achievement will allow both countries to move forward on demonstrating the critical benefits of this specific agreement and the broader commitment to a positive trade liberalization agenda,” says Andrew N. Liveris, chairman and CEO of Dow Chemical. According to Dow, the agreement will provide more than $1 million in tariff reductions for the KYOD O/ NEWSCO M
Obama (left) shakes hands with South Korean President Lee Myung-bak as the two met in November to work on a revised free trade agreement.
makers say agreement will boost exports to growing Asian market
PFIZER (BOTH)
IAN READ IS PFIZER’S NEW CEO PHARMACEUTICALS: Thirtyyear company veteran takes over from Jeffrey Kindler FIZER HAS NAMED Ian C. Read, currently head of the firm’s biopharmaceutical operations, as president and CEO. He replaces Jeffrey B. Kindler, who resigned. The Dec. 5 announcement came abruptly on a Sunday, catching most industry watchers by surprise. It followed by a matter of days Merck & Co.’s announcement that Kenneth C. Frazier will replace Richard T. Clark as CEO on Jan. 1, 2011. Read, 57, joined Pfizer in 1978. He held management positions in Latin America before being named president of Pfizer's international pharmaceuticals group in 1996. Since 2006, Read has managed business units accounting for 85% of the company’s sales. Kindler joined Pfizer in 2002, serving as general counsel before becoming CEO in 2005. Observers viewed his replacement of Henry A. McKinnell Jr. as an ac-
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company’s U.S.-manufactured exports to South Korea. “I am very pleased that the U.S. and South Korea have reached agreement on a landmark trade deal that is expected to increase annual exports of American goods by up to $11 billion and support at least 70,000 American jobs,” President Barack Obama said in announcing the bilateral pact on Dec. 3. The two nations signed a free trade agreement in 2007 under former president George W. Bush. But the deal’s ratification had been on hold in both nations because of strong opposition by some stakeholders, especially automakers and labor unions in the U.S. The modified pact eases opposition by including new provisions that should enhance the U.S. auto industry’s access to the South Korean market. South Korea is a major market for U.S. chemical exports. The agreement “is of particular significance for the U.S. because the increase in U.S. exports to Korea will provide jobs for thousands of American workers, just when jobs must be the most important focus of U.S. economic policy,” says Michael E. Campbell, chairman, president, and CEO of Arch Chemicals. Currently, U.S. exports to South Korea face an average applied tariff of 11.2%, whereas the equivalent U.S. tariff on Korean exports is 3.7%. The agreement will level the playing field—nearly 95% of all bilateral trade in industrial and consumer products will become dutyfree within three years. The pact still must be approved by Congress and South Korea’s National Assembly.—GLENN HESS
knowledgment by Pfizer that it needed to change. Indeed, Kindler oversaw a transformation that included the formation of global business units, a restructuring of research, and an expansion in areas such as biologic drugs. His tenure was capped by Pfizer’s 2009 acquisition of Wyeth. In a statement, Kindler noted that the upcoming one-year anniversary of the Wyeth deal was a logical time for him to turn over the reins, adding that leading the huge drug company has been “extremely demanding on me personally.” The announcement came as a surprise, says Michael P. Krensavage, principal of Krensavage Asset Management. “Usually companies try to telegraph the next chief executive,” he says. “Look at Merck. The board there had been giving Frazier greater responsibility.” Although little is known about what transpired behind the scenes at Pfizer, Krensavage notes that shareholders are frustrated with the company’s stock price. “And it is yet to be seen if Kindler accomplished his most important job—bringing drugs to market,” he adds. In a note to investors, stock analyst Jami Rubin of Goldman Sachs applauded the move. “Change will be good for Pfizer, which will now be led by a seasoned executive with over 20 years’ experience running many different regions and businesses in pharma,” Rubin wrote.—RICK MULLIN
DECEMBER 13, 2010
