Invacare plays hardball…

January 11, 2010

While the rest of the country went back to work last week, Congress is just getting around to that task today and by most accounts healthcare is at the top of the agenda. But one company seems to have gotten an early start: Invacare (IVC) filed this 8K on Friday, which certainly caught our attention. Here’s a snip:

The U.S. Senate and the U.S. House of Representatives each recently passed health care reform legislation that includes a new tax on medical device manufacturers, such as Invacare Corporation (the —Company). The Senate version of health care reform would impose a yearly sales-based tax on medical device manufacturers intended to raise $2 billion in tax revenue annually beginning in 2011, and $3 billion in annual tax revenue beginning in 2017…Based on the Company’s interpretation of the Senate proposal, the Company estimates that the new tax could result in an impact to the Company of approximately $12 million to $14 million annually. The Company continues to actively lobby members of Congress in an effort to make the proposed legislation less onerous on medical device manufacturers, and, until the legislation is finalized, there can be no assurance that the tax may not be eliminated, modified or delayed.

A quick scan of recent stories about Invacare certainly shows that the company has been beating the drum — and hard — about this issue and much more so than other companies. For example, the 8K also noted that the company may need to take more “cost-reduction actions such as shifting more production overseas (and) reducing employee benefits” which can’t sit well with Invacare’s employees — 1,300 of whom are in Ohio. The filing also noted that it has stopped 401-K matching and has suspended merit pay. Them’s fighting words, which, of course, make politicians pay attention.

Indeed, as this story in the Plain-Dealer notes, Sen. George Voinovich has already taken up the cause. And as this story in the Elyria newspaper points out, Invacare CEO A. Malachi Mixon III hopes to be able to talk to President Obama when he visits Ohio on Jan. 22.

Of course, nothing speaks louder in Washington than cold hard cash and Invacare has certainly been spreading lots of that around, according to Open Secrets which lists 73 separate donations to numerous politicians in 2009. And those records are only through the end of September, so we’re guessing there was plenty more spent during the fourth quarter.

Image source: Invacare

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