Merck Decides to Close Summit Facility

October 2, 2013
The pharmaceutical company's departure from Summit will have economic impacts on local business owners and the municipality.

By Senior Correspondent Desirée Taylor
NJ Today

Merck’s decision to close its Summit facility is a tough pill for this community to swallow, especially since the pharmaceutical giant had previously announced plans to move its global headquarters to Summit.

“Oct. 14 we were gonna have a Planning Board meeting to finalize their new campus for their corporate global headquarters. So obviously that meeting won’t be taking place. But that’s how surprised we were. We really thought that they were here for the duration,” said Summit Mayor Ellen Dickson.

Summit isn’t the only community feeling the pain. Merck also plans to close its current global headquarters in Whitehouse Station and move it to an existing facility in Kenilworth.

The reason? Cost savings, according to Merck officials. And much of that cost savings will be achieved by reducing the company’s global workforce by 20 percent — some 81,000 employees. It’s not clear how many New Jersey jobs will be impacted, but it will impact local merchants when Merck closes its Summit campus in 2015.

“We do good business with them,” said Summit Bagel owner Phillip Alarashi. “If they shut it down, we’re losing all that.”

“We have many customers from Merck,” said Liberty Cleaners owner Gi Heun Park. “I don’t think it is a good news either for the city of Summit or for the retail store owners because they’ve been good customers.”

Another economic blow, Merck is Summit’s biggest taxpayer. But since it owns the campus, it will continue to pay taxes and the mayor is optimistic another company will move in when Merck leaves.

“It is very modern, a lot of money has been spent on the campus. It’s a great location,” Dickson said.

Another drug maker — Warner Chilcott — said it will lay off 88 employees in Rockaway. Last year, Roche announced plans to shut its facility in Nutley and Clifton, a loss of several thousand jobs.

It’s just another sign that New Jersey’s once thriving pharmaceutical industry is changing and shrinking, partly because of mergers and acquisitions and increased competition from cheaper, generic drugs.