Daily Management Review

Jobs Boost to Post-Brexit UK given by McDonald’s and Glaxo


07/28/2016




Jobs Boost to Post-Brexit UK given by McDonald’s and Glaxo
Joining GlaxoSmithKline Plc in a vow to bolster British employment following the nation’s historic vote to leave the European Union, McDonald’s Corp. has said that it will create more than 5,000 new jobs in the U.K. by the end of 2017.
 
Paul Pomroy, chief executive officer of McDonald’s U.K., said in a statement that the burger chain’s British workforce would reach more than 110,000 as the new jobs at McDonald’s will add to the 8,000 that the burger chain announced in 2014. The McDonald’s announcement was termed as “great news for the U.K. economy” by Greg Clark, secretary of state for the Department for Business, Energy and Industrial Strategy.
 
“The government is committed to ensuring businesses have the support they need to thrive and today’s announcement underlines that businesses are confident that the U.K. remains open for business,” Clark said in a statement.
 
Pomroy said that 41 straight quarters of sales growth in the U.K. have been delivered by the U.S.-based chain.
 
“These remain challenging economic conditions, but I’m pleased that, together with our franchisees, we remain committed to the U.K.,” Pomroy said.
 
To increase the capacity to make respiratory and biologic medicines, mostly for export, 275 million pounds ($360 million) would be invested in the UK by Glaxo, the U.K.’s biggest drugmaker, which had supported remaining in the bloc. The London-based company said in a statement this week that the spending will be spread across two locations in England and one in Scotland.
 
New products, which brought in more than twice as much revenue in the second quarter as they did a year earlier, and its continued growth  is the betting point for the company. CEO Andrew Witty said that with currency effects boosting sales by 7 percent and profit by 26 percent, the drugmaker is also benefiting from the weakening of the British pound following the U.K. vote to leave the EU.
 
“The vote happened, and it’s a democracy, and we will make the most of it. I am delighted we are able to announce these capital investments today, not because of our view about Brexit, but it shows confidence in our products,” Witty said in an interview with Bloomberg Television.

An industry task force on life sciences set up by the U.K. government that aims to identify opportunities for the sector following the Brexit referendum is chaired by Witty along with AstraZeneca Plc CEO Pascal Soriot. With questions about how an exit from the EU would affect immigration policy, drug regulation, trade agreements and the movement of goods like raw materials, the Brexit outcome has created uncertainty for pharmaceutical and biotechnology companies.
 
Glaxo said that Britain’s corporate tax system, which provides a lower rate on profits from U.K.-owned intellectual property, is one attraction for companies. The company further said that access to technology and key infrastructure and a skilled workforce are also other points of attraction.
 
“An investment of this scale is a clear vote of confidence in Britain and underlines our position as a global business leader. GSK’s recognition of our skilled workforce, world leading scientific capabilities and competitive tax environment is further proof that there really is no place better in Europe to grow a business,” Clark, the U.K. official, said in a separate statement.
 
The Glaxo statement said that to fund a new sterile facility for biopharmaceutical products, a 92 million-pound investment would be made in Glaxo’s manufacturing site in Barnard Castle, England. A new facility to manufacture respiratory drug ingredients in the Montrose site in Scotland will also get 110 million pounds of investment. The unit makes active ingredients. 74 million pounds to expand inhaler manufacturing capacity would be given to the Ware, England, site.
 
Saying it would create 900 positions at a new online fulfilment center, J Sainsbury Plc also recently pledged to add jobs. A validation of the UK’s economy was also evident from SoftBank Group Corp.’s 24.3-billion-pound deal to buy British chip designer ARM Holdings Plc this month.
 
(Source:www.bloomberg.com) 






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