J&J CEO Praises Tylenol Exec Who Let His Boss Walk Into Congressional Ambush

Last Updated Sep 30, 2010 5:22 PM EDT

Here's how strange top management is at Johnson & Johnson (JNJ): CEO William Weldon says he has full confidence in Peter Luther, J&J's Tylenol chief, despite eight recalls of the product and even though Luther didn't tell worldwide chairman Colleen Goggins that he approved a secret "phantom" recall of Motrin in 2009.

Goggins -- ostensibly Luther's boss -- told Congress today that the first she time she heard of the Motrin recall was when she was questioned about it by the House Oversight Committee in May. That means Luther failed to tell Goggins about the secret recall when it was going on in 2009, and he failed to tell her about it before she arrived to testify to Congress on recalls of products Luther was responsible for. What kind of manager does that?

Goggins recently announced her resignation even though she was a potential successor to Weldon as CEO. In a second hearing on the Tylenol recalls today, Goggins was asked by Rep. Dennis Kucinich, D-Ohio, about Motrin, "You knew nothing about it, really?" She replied:
I did not know at my testimony in May.
She later added:
I was not in the loop on the Motrin recall but I was in the loop on the children's Tylenol recall because we received a 483 [communication] from the FDA. I was not in the loop on the Motrin recall until I came to the committee and looked at the documents.
Weldon was then asked why Luther still had a job. Rep. Darrell Issa, R-Calif., attempted to argue that if J&J wanted to instill confidence then the people who were in charge when the problem arose ought to have been dismissed. Here's what Weldon said about Luther, the president of McNeil Consumer Healthcare, the unit of J&J that makes Tylenol and Motrin, whose tenure at the top has coincided with the current problems:
Weldon: Mr. Luther has been a long-serving Johnson & Johnson employee. He's been a good employee for an extended period of time. Mr. Luther is committed to improving and revamping the facility ... Yes, I think Peter Luther is a good employee who can contribute to rectifying this problem.
Issa: To me that doesn't make very much sense.
Weldon: I think Mr. Luther was in charge but many changes were taken ... Mr. Luther has been a long-serving employee who has done a very good job for us. The players who we needed to replace have been replaced.
Weldon did not explain why Goggins' career was ended but Luther's was not.

Among those "players who we needed to replace" are a new vp of quality assurance, a new vp of operations, and a new plant manager and a new head of quality at Fort Washington, Pa. In addition, J&J now has new chief quality officers for J&J's three business segments (consumer, pharmaceutical and medical devices). Those executives report to a chief quality officer for the company, and that person reports directly to Weldon. Those changes go some way to rebuilding the quality and compliance department that was decimated under Weldon post-2006 -- first reported by BNET in May -- leading to the lapses at McNeil.

The committee also released more documents from J&J and the FDA surrounding the secret Motrin recall. It turns out the FDA did know what J&J was doing -- in contradiction to FDA's previous testimony that it did not know. This set of documents released by Republicans on the committee show several messages back and forth between J&J and the FDA. Oversight chairman Ed Towns, D-N.Y., released more internal J&J documents describing how the phantom Motrin recall was organized.


Market Data

Market News

Stock Watchlist