We can expect to see changes in Johnson & Johnson (JNJ) coinciding with the induction of the company’s new CEO.
Alex Gorsky, the new CEO, who will soon be taking his position at the company’s head, plans to adopt a realistic and optimistic approach to the challenges and opportunities that Johnson & Johnson will face. Although Gorsky was very optimistic in the first speech to the company’s shareholders recently, the question still on my mind is whether or not a simple change in attitude will be enough to counteract the company’s mounting problems.
Recently, Johnson & Johnson has found itself on the wrong side of about 30 product recalls. Recalled products include Tylenol, as well as many other non-prescription drugs. The drugs were recalled due to concerns about their quality. The financial implications of this extend beyond simply losing money on the recalled products. As a result of the recalls, the company has also been required to spend an enormous amount of money on rebuilding a factory in the hope that this will ensure better production quality in the future. This factory will not be functional until 2014.
On top of this, Johnson & Johnson is involved in a number of lawsuits over faulty hip implants. It was recently required to pay a fine of $1.1 billion to the state of Arkansas, for a lack of honesty regarding the side effects its antipsychotic drug, Risperdal. If the company’s appeal against this ruling fails, it will probably mean that many other states will also file, and win, in cases against Johnson & Johnson.To continue reading, click here.