Shift to R&D prompts Philips Healthcare to shutter manufacturing at Cleveland imaging plant

February 12, 2018 By Brad Perriello Leave a Comment

The healthcare business at Royal Philips (NYSE:PHG) said last week that it plans to shutter manufacturing operations at a Cleveland plant that makes computed tomography scanners as part of a $600 million R&D initiative.

The Dutch healthcare giant said Feb. 9 that it also plans to invest in a service training program in Cleveland. Manufacturing at the CT plant in Highland Heights, Ohio, which accounts for 3% of Philips’ imaging sales, is slated to shut down during the second half of the year, the company said. Philips plans to spends $600 million annually on its North American R&D programs.

“Philips is well underway to step up the long-term success of its diagnostic imaging businesses,” diagnosis & treatment chief business leader Rob Cascella said in prepared remarks. “With these investments, we will accelerate innovation in advanced diagnostic imaging at our Cleveland center of excellence and further enhance our customer services.”

In early 2014 Philips Healthcare halted work at the Highland Heights site after an FDA inspection turned up some concerns with process controls. Although the company initially hoped that the facility would be up and running by the 2nd half of that year, problems persisted into 2015 even after production resumed in early 2015.

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