Puerto Rico’s future success and prosperity depends on its ability to continue innovating to remain competitive and relevant, figure out a way to retain its strong talent pool and refrain from falling into the category of not being “business friendly,” said Michael Mussallem, CEO of Edwards Lifesciences to a standing-room-only group of executives Thursday.
During the Puerto Rico Manufacturers Association’s executive summit event, the executive who spent 20 years leading Baxter’s operations and has been visiting the island since, said Puerto Rico’s rich manufacturing history is not enough to keep it competitive.
“The challenge is to continue innovating to remain competitive and relevant,” he said. “Part of that also has to do with education, which must stay fresh and relevant and keep changing in accordance with what is needed.”
Mussallem, who in his presentation spoke optimistically about the island’s ability to make the right long-term changes, also said the government’s surprising approval of Law 154 has challenged Puerto Rico’s reputation as a “business friendly environment.”
“It’s hard to put the genie back in the bottle when something like this happens. Law 154, whether misguided or not, is well intended. However, when you do something like that as a surprise, it makes a businessperson stand back and wonder what the next surprise is going to be,” he said.
During the last weekend in October 2010, the Legislature approved, without public hearings or discussions, a bill that Gov. Luis Fortuño signed into Law 154, an unexpected move that established a temporary 4 percent tax on foreign corporations starting in January.
The levy is expected to shore up about $1.2 billion a year for the government to finance its recently passed tax reform that provides relief to individuals and corporations. The tax took affected companies, mostly pharmaceuticals, aback and set off alarms over the possibility of shutdowns or downsizings.
“There’s something about consistency and the ability to execute a long-term plan, which is important to businesses,” said Mussallem, adding that the impact of the tax has not been positive on Edwards Lifesciences Añasco operations.
To that effect, he said the medical device company’s tax team has been in constant communication with the government to find alternatives to the law’s impact. Mussallem, however, could not specify what Edwards is seeking.
California-based Edwards Lifesciences has been doing business in Puerto Rico since 1972, employing about 1,000 people at it’s Añasco complex, where it manufactures critical care technologies. Mussallem said the plant is Edwards’ leading facility worldwide.
“We’re very optimistic about the future and that is based on the great progress that has been made at the plant, not only on a long-term basis, but regarding the new energy and spirit of innovation and improvement that resides at the plant,” he said, during a meeting with members of the media following his presentation.
“We have an incredible group of people at our Añasco facility, who have the experience and passion for what they do,” he concluded.