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We welcome you to this edition of conference -- here on the Fox Business Network and no I have not aged.
This is part of the technology that surrounds us here in the town of Warsaw Indiana tell you more about why were in Warsaw in a moment.
The technology of the medical device industry.
It is an industry perhaps you've heard some about lately because of 2.3 percent excise tax is being imposed on the industry's part.
For the financing of the government's.
Health Care Reform and we've got a couple of executives.
That industry with -- Tom Allen is the CEO of like policy.
Next to him is mark throat all who is -- or copd -- -- CEO and Eric Jordan is the Indiana economic development to the corporation.
President yeah -- interest in all economic development Indiana.
First of all.
I guess I should give our viewers some sense of why we're in Warsaw this is a hot -- some people call this the orthopedic.
Capital of the world and it's these kinds of devices.
That you develop that actually make people's lives easier joint replacement.
All sorts of stuff right mark.
That's absolutely right these are products that use in children who fractures or serious deformities the legs in the spine.
Specialize in your company specializes in pediatric.
-- and orthopedic products Tom you do -- -- and joint replacements which we all know and probably all have relatives that have.
Benefited from -- impact of the tax on companies like you are specifically.
You are to innovators.
Are coming from larger company starting your own company's.
You're not profitable yet you're developing products already -- -- -- use.
And this tax is not a tax on your profits its attacks on your sales correct.
Stick it right -- this is a tax on sales we have no profits to.
Pay it from.
So the only way to stump up the money to pay tax of this size is by cutting programs.
And Tom what kind of programs do you want to cutting what -- what kind of impact is this tax already had -- Well at Texas now had a -- -- because we're in launch -- chip but the bottom line is I can't hire anybody until we get.
Greater profitability and income -- with cash flow.
That's what mark and I were talking about camera for a minute is that how much it takes to get these things up and running -- years of experience.
A boulder to push -- -- just to get it going.
Yeah and tangible indication of this is that all of the engineers -- surround me.
Their payroll is equivalent to the tax were now paying Washington.
So we could double the size of our technical staff if -- were not for the medical device tax -- This industry is one that lives on innovation.
He improving the joint -- their replacements that people have had a coming up with new ways of curing things.
This has been a hot -- in Warsaw and may be -- Eric you can give us some sense of this how important this is industry is to this part of the country and and for our viewers' sake.
How is this grown to such an industry in this town in this county.
Well because an Indiana we have had a history of -- ownership.
-- and in this arena and these are high paying jobs.
And that thing this sort of discipline doesn't think as a state -- governor pence in the state house has done an incredible job of lowering taxes.
Of trying to create a better environment for these businesses to starting to grow.
And we are trying to grow that middle income wage in these jobs have an average wage of 88000 dollars.
And here we are having a tax imposed but to us by the federal government that is actually eliminating or reducing these jobs devil's advocate here how.
-- the other industries.
Pharmaceutical industry insurance industry hospital industry they all say they -- gave something as part of the implementation of the Health Care Reform.
Could you guys gives them.
Well you know it's interesting thing about whether anything game.
Massachusetts passed universal health care coverage many years ago.
There's been no explosion demand for medical devices in Massachusetts it's a market like any other.
There is no evidence I've seen anywhere dissident really stimulate.
Demand for products we will gain nothing from us.
But in the in this the sense -- everyone needs to contribute something who who may be part of the industry but he says that.
-- if you look at her.
Trying to give back something and -- But you look at the tax and it's coming in and sales you can't -- that back I mean what mark said it clearly he can double the size of his engineering group.
But what white way -- replace something that wasn't there a few years -- -- and we're not gaining anything back or not gonna get more business and higher market.
Obviously the government is trying to generate a lot of income as part of this tax -- pointed the figure is.
To -- nine billion dollars over the course of the next ten years.
That's a lot of money to raise what would that kind of money taken out of your industry due to.
Over the course of the next decade there estimates that over 40000 jobs will be impacted in the medical technology industry buys them heist acts.
I think that's the -- do you want to sacrifice that amount of employment.
And furthermore do you want to attack one of the few remaining industries for America has global leadership.
Yes the US is noted for developing this kind technology and he.
I was gonna say -- you've been down this road longer than others -- I spent twenty years in international sales as well so I know what a foreign companies make and produce and are -- -- gold standard in this industry.
In terms of impact.
What was the device -- do.
Or some large percentage of jobs that come from this town this area.
The state yeah about 13 of the of the sales -- the peace comes from this area.
So this is a huge economic driver for Indiana and a huge employee base with I wages and a lot of jobs mystic.
If you had one line to it is -- to the president we leave it with.
That what would you say.
How would you best make your case in the short sentence.
I think I'd say that the Affordable Care Act is very noble it.
That is flawed because of -- -- -- Tom I agree with percent punitive damages.
Type of situation.
We're facing in this industry we should -- The voice of one industry impacted by.
Health Care Reform.
Think -- -- all senate passed a noble ideas to reform the nation's health care system but important to see what the impacts more.
Some people called the orthopedic capital of the world and Jeff Flock thanks for watching conference --
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