Cook Medical Cancels Plans for Factory Expansions–We Need Companies That Create Tangible Products As They Create Jobs̵
Posted Jul 27 2012 9:56pm
Yes I have said this many times and those folks with a few geeks that mine data, to include banks, social networks, high frequency traders, insurance companies and so on make billions with a little code out there on the internet, while companies such as Cook can’t afford to expand and make life saving medical devices. Back when the law was written things were different but a lot happens in a couple of years. Just look at how rich the banks are for one and corporate profits on public companies have been at all time highs. Nobody has to admit they made a mistake with the law, just fix it to work with current economic times.
I’m glad Cook announced this to get some attention as we are so wrapped up with mining data today that we not balanced. Technology has value for sure but look at what the banks do on selling algorithms..software in the words of Bills Gates is nothing but a bunch of algorithms working together. I can’t eat an algorithm for breakfast, wear one, why we need more tangibles to balance with the intangibles. Analysts look at this balance all the time.
Algorithms don’t need benefits with retirement and health insurance and many can run without humans around. The data mining folks are getting to be nuisance in may areas as states have to put in governor software to keep of the bots out so us citizens can still get in to servers that are busy with algorithms mining data. Nobody’s going to cry if banks and other business pay a quarterly excise tax on what they make. Walgreen sin 2010 on their SEC statement made short of $800 million selling data only, so does that give you a clear example on the available money out there to tax? It
s huge and even bigger than the device tax, so why not?
Sure some device companies sell data but they would be lumped in with everyone else and the cost split among a much larger pool and they could afford it at that point. We also need a federal disclosure page so as consumers we know who’s selling what type of data to who. What’s even worse without a balance of intangibles and tangibles is the fact that it keeps inequality alive and growing so there’s bonus right there. Actually this should be the next chapter in the Killer Algorithm series I have going here.
Cook is the largest privately owned device company in the US too, so give that some real thought. Look at what they say about the device tax, will raise over $30 billion in a decade, well shoot tax the data sellers and you could probably hit that number in 5 years or less, half the amount of time. That’s why it makes sense to pursue another route and keep the tangible companies in business in the US. Who knows a company such as Cook could probably even jump in with a generic device division for commonly used nut and bolts as are used in back surgeries, etc. as that’s what is beginning to happen and we still win with jobs here in the US to make them.
I have done a few interviews with Cook and they have been very informative and not the typical Fortune 500 public company interviews either as they can focus on products instead of shareholders, which is nice. Here’s a few links below.
Again go after the data sellers who make billions a year and tax that revenue so it won’t be as attractive to mine data instead of creating tangible products and bring some balance back. We have been basing our economy on formulas being over rated and we the tangible companies for jobs. Cook says now more of their growth will be focused overseas and they already have facilities in Ireland, Denmark and Australia. BD
Cook Medical claims the tax on medical devices, set to take effect next year, will cost the company roughly $20 million a year, cutting into money that would otherwise go toward expanding into new facilities over the next five years.
He said the original plan was to build factories in "hard-pressed" Midwestern communities, each employing up to 300 people. But those factories cost roughly the same amount as the projected cost of the new tax.
The Affordable Care Act imposed a 2.3 percent tax on medical devices beginning in 2013. It is projected raise nearly $30 billion over the next decade.
But the Cook Medical spokesman said the impact is greater than just a 2.3 percent uptick in taxes. He said the impact on actual earnings is another 15 percent, and he projected the company's total tax burden next year will rise to over 50 percent.