Israel, which (as with other governments) is supposed to derive the legitimacy of its power by operating in the public interest, granted Teva about $6 billion in tax breaks and subsidies over the last decade. Now Teva’s board of directors — undemocratically elected by its major shareholders — has fired 14,000 workers because the corporation is having difficulty sustaining the costs of its poor managerial decisions. A small number of rich people on a board of directors, making key decisions that affects many thousands of people, is thus the antithesis of economic democracy.
The first homegrown, global success story and one of Israel’s largest employers, Teva is both a source of pride and a symbol of the country’s financial ambitions. Its place in the Israeli public’s imagination is similar to the one General Motors, in its heyday, occupied in America — but in a nation with a population about the size of New York City’s. The company’s shares are owned by so many pension funds that it is known informally as the people’s stock.
Today, many of those people are furious. Management missteps and tectonic shifts in the pharmaceutical business have battered Teva, which faces declining prices for generic drugs and the loss of a patent on a major branded drug. More than $20 billion has been shorn from the company’s market capitalization since 2017 began, cutting Teva’s value roughly in half.
About the only positive reaction to this news came from investors, who sent Teva shares up about 14 percent. Prime Minister Benjamin Netanyahu said in a statement that he would urge the company to “retain its Israeli identity,” words that seemed to mollify no one.
Three days after Teva’s announcement, some workers burned tires outside a Teva plant while others tied up rush-hour traffic with street protests. It went beyond workers, with people across the country taking part in a half-day strike that closed banks, government institutions, the stock exchange and Ben-Gurion International Airport near Tel Aviv.
Teva employees continued to protest for days. “There is uncertainty, fear,” said Lital Nahum, a 25-year-old lab worker who was sitting on a wall outside a Teva plant in Jerusalem last week, as two dozen other striking workers milled around. “Nobody thought it would come to this.”
With domestic plants targeted for closing, many people argued that Teva factories in India and Ireland should be closed before any in Israel. Mr. Netanyahu agreed and said that the government would use “various means at our disposal” to urge the company to keep its plants in Jerusalem open.
Mr. Netanyahu did not specify what those means might be, but a guilt trip appeared to be his only weapon. Teva has enjoyed tax breaks and subsidies worth nearly $6 billion over the last decade.