ICN Workers in Mass Protest

More than 1,000 ICN Pharmaceuticals Inc. workers walked off the job in Yugoslavia on Monday to support their boss, Milan Panic, in his fight to take back a factory seized by the Yugoslav government.

But police here turned the screws still tighter on ICN’s Yugoslav subsidiary by arresting six of his local vice presidents, Panic said.

“I think this is not about business anymore,” Panic, chairman and chief executive of the Costa Mesa-based company, said in a telephone interview Monday from Hungary. “This is violating the human rights of these people. This cannot be left unpunished.”

The government seized the Yugoslav subsidiary in Belgrade on Friday, and police armed with assault rifles entered the plant Saturday to impose new management.

Panic is a former Yugoslav prime minister and political archenemy of Yugoslav President Slobodan Milosevic, who is fighting international pressure to make a permanent peace with ethnic Albanian rebels in Kosovo province or face attack by North Atlantic Treaty Organization forces.

Panic sees the government’s move, which he labeled a nationalization, as part of an anti-American campaign stirred up by Serb nationalists opposed to current Kosovo peace talks in France and to plans for putting about 30,000 NATO troops in Kosovo if a deal is reached.

Although they refused to blame Milosevic by name, both Panic and his general manager, Dusan Mitevic, left no doubt they believe that the Yugoslav president is behind the seizure of ICN’s plant.

“It’s very easy for me to guess, but very difficult for me to say,” Mitevic said in an interview here. “You have to keep in mind that the main way this government functions is through personal authority. Only one personality has power here. All others are executors.”

The state-run Health Fund of Serbia owes ICN’s Yugoslav subsidiary more than $176 million that the government said in July it wouldn’t pay, Mitevic added.

In seizing the factory, the Yugoslav Federal Ministry of Health said ICN had failed to make investments as required by a 1991 agreement to buy control of the plant, according to Bloomberg News.

The health ministry said ICN was obliged to transfer $220 million in drug patents to its Yugoslav subsidiary in addition to investing $50 million in cash. ICN says it has made all required investments.

Health Minister Leposava Milicevic of Serbia, the dominant republic of Yugoslavia, insists the government is simply reclaiming the drug factory for the republic’s citizens. She now calls the factory Galenika, its name under the communist rule that ended nearly a decade ago.

“Our intention is to give Galenika back to you, and to citizens of Serbia--nothing else,” she told some of the factory’s workers Monday, in a speech broadcast later on state television.

If the government has a disagreement with ICN, Panic said, the contract between the two parties stipulates that a panel of three judges sitting in Paris should resolve the dispute.

Panic promised a year’s full pay and benefits to employees who swear allegiance to his ownership, stop working for the new managers and sign a boycott pledge.

About 80% of the plant’s 2,000 employees stayed off the job Monday and about 1,800 signed a promise to stand behind Panic in his dispute with the government, he maintained.

But the government insists 1,600 people returned to work. Milicevic, the Serbian health minister, said many were former employees whom Panic had laid off or fired for organizing trade unions.

Brkic Djurdja, 33, has supported a husband and two children on the $140 a month she earns as a packer in the ICN factory. She walked off the job in support of Panic just after noon Monday.

“This is one of two evils, and we are choosing the lesser evil,” Djurdja said through an interpreter after passing through the factory gates with half a dozen of her co-workers.

“What matters is trust, and we absolutely trust Panic,” she added. “But we don’t trust the people near him--the immediate managers.”

Only about 200 employees stayed in the factory’s cafeteria to hear the new management’s appeal to keep working, Djurdja said. There were no threats issued against those who left, she added.

The plant is now run by Marija Krstajic, the acting general manager. She is a Communist political ally of Milosevic’s wife, Mirjana Markovic, according to Mitevic.

The ICN factory is Yugoslavia’s largest drug manufacturer and, until Friday, was its biggest privately owned company. Panic bought 75% control of the firm from the Yugoslav government in 1990. After the seizure Friday, the government claimed it now owns 65% of the company.

Milosevic made Panic prime minister in 1992. Soon after Panic took office, he led an effort to oust Milosevic, who was then president of Serbia.

In July, according to Mitevic, Panic rejected a secret offer to join the Yugoslav United Left party headed by Milosevic’s wife. At the same time, the state stopped buying drugs from Panic’s firm.

“That’s when things went from bad to worse at the plant,” said Djurdja, the employee. “For the last month we didn’t work at all because there were no raw materials.”

Even as police were arresting his six vice presidents at their homes Monday, Panic continued to defy Milosevic with an ad campaign that has run in local newspapers and magazines for months.

The ads feature a large, white pill labeled “Democracy” frozen in the middle of an ice cube.

“Spring will come eventually,” the ad says, above ICN’s corporate logo. “Power is in us.”