Jax Lab is on the Rebound

BAR HARBOR — The largest employer in Hancock County is hiring again, nearly one year after announcing a hiring freeze, and seven months after the deteriorating international economy caused the lab to eliminate dozens of jobs and cut hours for hundreds of employees.


The Jackson Laboratory (Jax), which employs nearly 1,400 people, is back on solid financial footing, vice president and chief operating officer Chuck Hewett, Ph.D. said Monday. Nearly 50 jobs are open at the Bar Harbor campus, and all of the 315 workers who had their hours cut in the spring are back to full-time employment.

“I tell my people, we’re extremely lucky to be where we are today,” Dr. Hewett said. “In large part, it’s because people worked unbelievably hard to figure out how to stabilize our ship, and do the right thing so we could move forward.”

The financial turnaround at the lab is mainly due to a major increase in mouse sales, after the business took a serious dip last winter. The increase in sales, in turn, was a direct result of President Barack Obama’s economic stimulus plan, which passed the United States Congress in March, Dr. Hewett said.

The stimulus plan, officially known as the American Recovery and Reinvestment Act, provided the National Institutes of Health (NIH) with $10.4 billion. By the start of this month, the NIH had granted nearly half the money, $5 billion, with the majority going toward genetics research, according to reports.

Because the lab is one of the world’s top suppliers of mice for genetic research, as well as the home of the mouse genome, the stimulus funding directly impacted mouse sales.

Jax also benefited directly from stimulus funding, being awarded more than $13 million in NIH grants for research and building construction.

Scientists working at the lab have received 19 scientific research grants from NIH, with a total value of $6.1 million. A $5 million construction grant, announced in May, will fund the construction of a new shipping and warehousing facility, while a recent $2.1 million NIH grant will fund the purchase of a new genome sequencing machine and renovation of two mouse rooms.

And although the organization is on firmer financial ground than it was last spring, there are still major challenges ahead, Dr. Hewett said. Mouse sales have rebounded, but there remains a chance that they will drop again once the two-year stimulus funding program ends. Further, a significant drop last winter in the company’s endowment portfolio, from more than $80 million to less than $50 million, has left little money for capital spending or borrowing for capital spending, Dr. Hewett said.

“That drop in endowment puts us a lot closer to our dead equity limit, and potentially closer to the covenants that we have to meet for our bonds,” he said. The remaining endowment was also placed in low-risk investment areas after the decrease last winter, making the outlook for a significant rebound a slow, long-term proposition, he said.

While lab officials are now looking to fill approximately 50 jobs, Dr. Hewett would not go so far as to say the hiring freeze set in place in January is over, referring to it instead as a “soft freeze.”

“We’re continuing to be very diligent about any position that we fill,” he said, and likely will be for some time to come.

In March, lab officials reported an expected deficit of $4 to $5 million by May 31, the end of the fiscal year. Measures such as the elimination of 55 jobs, reduction of hours for hundreds, and an aggressive push to increase revenues allowed the organization to end the fiscal year without the projected deficit, Dr. Hewett said.

A projected $15 million deficit for this fiscal year, which would have occurred if the trends outlined in March had continued, is no longer on the table, he said, with projections now for positive growth.

“I feel very good about where the lab is this fiscal year,” Dr. Hewett said.

Workers who were eliminated in the spring are welcome to apply for the jobs now open, he said. Pay would be based on whatever is appropriate for the job and worker’s skill levels, he said, and would be a negotiated process. Retirement contributions would start immediately, while vacation accrual would go back to entry levels.

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