On Thursday morning, 85 buses deposited nearly 5,000 employees of Boston Scientific's Twin Cities operations on the doorstep of the Minneapolis Convention Center. As the mass moved into a cavernous auditorium, the soundtrack featured soul singer Al Green, who crooned, "Let's Stay Together."
In the past, they had been together in name only -- operating as two disparate divisions under the Natick, Mass.-based medical technology company's $8.2 billion umbrella.
One focused largely on cardiac stents, the other mostly on heart defibrillators and pacemakers, with products treating distinct diseases and conditions. But earlier this year, the two were merged into a division called Cardiology, Rhythm and Vascular (or CRV for short) in an effort to capitalize on their shared "synergies."
Since then, however, Boston Scientific has been preoccupied with a series of issues. Last spring, it recalled its entire line of heart defibrillators for a month due to recordkeeping errors. The debate over health care reform raged in Washington, leadership changed at the Food and Drug Administration (FDA), and the impact of both remains unclear. Approximately 1,000 employees were let go company-wide, some locally, as two key markets -- stents and defibrillators -- foundered and the overall economy kept getting worse. Boston Scientific's stock continues to linger near a 52-week low.
'Way overdue'
It was high time for a pep rally.
On Thursday, first-year CEO Ray Elliott was in a mood to celebrate, and the high-tech corporate party didn't disappoint. Clad casually in loafers and shirt-sleeves, Elliott was flanked by two huge video screens projecting his image as he paced about the stage expounding on the company's strategic plan.
It was the first time employees from the two former businesses in Maple Grove and Arden Hills had ever congregated in the same setting. They were thanked by patients treated with devices they made, feted and fed at an elaborate celebration the company declined to put a price-tag on.
During the formal program, Elliott didn't pull any punches. The visit to Minnesota, he conceded, was "way overdue, but I've been busy." He said the company has been too slow with new product development, spends too much money to bring products to market, and it all takes too long -- a comment that prompted applause. Further, he noted, Boston Scientific learned "hard lessons" in overhauling its quality processes, which had drawn the ire of the FDA and prevented new products from being approved for two years.
But mostly, Elliott praised his employees and touted teamwork. He quoted hockey legend Herb Brooks (which drew a whoop from the distinctly Minnesota crowd): "The name on the front of your jersey is more important than the name on the back."
"I'm not interested in following Medtronic or Abbott or St. Jude or anyone else," he declared. "There is no bigger role or bigger thing we're doing than this. We tend to be back on our heels a bit, but we can hold our heads high." He dismissed naysayers who claim the company has taken on too much debt, in part because of its $26 billion purchase in 2006 of Arden Hills-based Guidant Corp.
Instead, he said, Boston Scientific has enough reserves to prowl for acquisitions -- "there is no other way." When the screen detailing potential targets was curiously blank, Elliott jokingly blamed the company's lawyers for the lack of disclosure.
But several potential markets stood out, including obesity and diabetes, structural heart devices, such as heart valves, and devices treating high blood pressure. "People are working on deals now," he said, adding: "we're not going to buy or build anything we don't understand."
When asked later about a rumored sale of the company's neuromodulation division to Michigan-based orthopedic firm Stryker, Elliott declined to comment.
Global growth
Another area of emphasis involves growing outside the United States. While sales of some medical devices languish in the United States, lucrative markets await in places like India, Brazil and China, Elliott said. Already, roughly 43 percent of Boston Scientific's annual revenue comes from outside the United States, but the company only has three employees in the burgeoning market of India. "And two of them are part time," Elliott quipped.
He said in coming weeks the company will spend $30 million to $40 million to bolster sales there and in China.
Elliott wasn't afraid to poke a little fun at himself.
In a mock-reality show video, he went "undercover" to interact with the company's hoi polloi. He suited up in clean room scrubs and asked "What's a stent?" When he said that he signed up for the company stock program, a faux co-worker quipped "it can't get much lower." When he hears an employee note, "I sure hope this plan works," another responds, "It can't with that idiot in charge."
Elliott said later the video was all in good fun, but acknowledged: "I'm a lousy actor."
Janet Moore • 612-673-7752
