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Manufacturers Deal with Heart Attacks and Terrorists

Industry ReportMerck and Lockheed Martin, two of the state’s biggest manufacturers based on their numbers of New Jersey employees, have been headed in different directions. While drugmaker Merck has been fighting plaintiffs and cutting payroll, defense contractor Lockheed has racked up an army of contracts, boosted by terrorism concerns and two U.S. wars.

Vioxx, Merck’s former blockbuster painkiller, has been the main monkey on the back of Whitehouse Station firm. The drug, shelved in 2004, has been at the center of five wrongful death lawsuits, one of which resulted in a multimillion-dollar award to the widow of a man who died of a heart attack while taking Vioxx. Merck has won two suits but some 9,000 have been filed.

Another blow to Merck’s product pipeline came early last year when a federal judge said the company’s bone-strengthening drug Fosamax would lose patent protection in 2008, not 2018 as expected.

The company’s revenues have plummeted almost 58% from $51.8 billion in 2002 to $22 billion last year. Its number of local workers dropped by a third from 11,961 in 2002 to 7,965 in 2005. Merck, with some 61,500 employees worldwide, said in November 2005 that it would slice 7,000 jobs and shutter five plants by the end of 2008.

Meanwhile, Lockheed, based in Bethesda, Md., but with a large presence in Moorestown, has been sitting pretty at the other end of the spectrum. The U.S. government, which makes up about 85% of the company’s sales, continues to pour money into homeland security and wage battles in Afghanistan and Iraq.

Lockheed’s revenues have risen nearly 40% from $26.6 billion in 2002 to $37.2 billion in 2005. Its numbers of employees here jumped 37% from 3,500 to 4,800 during the same period. Lockheed employs some 130,000 throughout the world.

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