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Did J&J Engage in Dirty Politics?

November 04, 2009 – Comments (2) | RELATED TICKERS: JNJ , GS

Coming so soon after Halloween, the news that Johnson & Johnson (JNJ) was bludgeoning its workforce with a budget axe was a bit of a shock. After all, the health care giant has often touted its commitment to employees. But was the timing of it a bit of a political message?

Consider the day they announced it: Election Day, when the company's home-state governor was locked in a deeply divisive, but incredibly close contest. A governor who is not well-liked as it is, and whose affiliations with an equally reviled Goldman Sachs (GS) were not a central theme for much of the campaign, had to contend with the news of major layoffs coming to the state. With health care reform a key battle, it was indeed significant that a major health care company was resorting to layoffs.

President Obama had campaigned in the state three times for ex-Goldman CEO Corzine, the most recent time being on Sunday. Unemployment in New Jersey is still soaring and now we'll be adding to their rolls. So it seems to be just interestingly coincidental timing that JNJ announces they're wielding a very sharp axe when voters might just need an additional reminder that the economy remains in the toilet, and if health care "reform" is passed things could get a whole lot worse -- and more expensive.

I'm not saying there was any political calculus in the announcement's timing, but it is interesting nonetheless.

Rich