Back in late September we examined for the second time the problems William Weldon, Johnson and Johnson’s JNJ (NYSE) CEO, faced after firm encountered a spate of major over the counter drug recalls. Johnson and Johnson under Weldon’s leadership has not done a great job in handling these problems and for that matter, continues to find itself facing new problems. Just recently one of the firm’s subsidiaries had to recall one of the firm’s over the counter antacid products, Rolaids. Up to this point the board has appeared to support Weldon but we finally have seen some action in this area. Earlier this week J and J, as reported in the Wall Street Journal, announced some management changes that have increased the battle for Weldon’s succession. According to the Journal,
J and J, New Brunswick, N.J., named Alex Gorsky, head of the medical devices and diagnostics unit, and Sheri McCoy, who heads the pharmaceutical unit, as vice chairmen of the executive committee and members of the office of the chairman, effective Jan. 3, 2011.
The race to succeed Weldon had previously appeared to be narrowed to Gorsky and McCoy in September when Colleen Goggins said she planned to step down as head of J and J’s third major unit, the consumer healthcare business. The consumer unit has been beleaguered by a series of product recalls due to quality lapses.
Johnson and Johnson must find new ways to get its house in order. Despite good financial results the continuing recall problems could ultimately have a very adverse impact on the firm going forward. Stay tuned as succession plans appear to be moving full steam ahead.