ELYRIA — Invacare Corp. announced Friday that it would sell a portion of its company to AssuraMed in Twinsburg for $150 million.
The announcement came a day after a consent decree was made requiring Invacare to stop manufacturing, designing and distributing manual and powered wheelchairs and components at its Elyria facilities until certain standards are met.
The proposed consent decree was filed in federal court Thursday by the U.S. Food and Drug Administration, which alleged Invacare wasn’t meeting quality control regulations. The decree, signed by Invacare’s top executives and approved by a judge of the U.S. District Court for the Northern District of Ohio, restricts operations at the company’s corporate facility in Elyria and its plant on Taylor Street.
Invacare spokeswoman Lara Mahoney said it’s too soon to tell how the move will affect the plant’s 350 workers, but she expects that there may be a reduction in workforce to meet the agency’s standards.
Invacare will continue “limited operations” at its Taylor Street plant, but customers must fill out paperwork before receiving a product. Under the decree, customers needing replacement devices or new users with a documented medical need for the product will be able to obtain an Invacare device.
Mahoney said workforce needs will be determined by the need for the company’s products.
“There are a lot of things we don’t know yet,” she said.
Mahoney said Invacare is dedicated to working with the FDA to improve its standards and had already been working to address several problems. She said she believes the decree will strengthen operations within the plant.
According to a permanent injunction complaint filed by the FDA in U.S. District Court, the FDA said it “repeatedly warned” Invacare of violations in 2003 and November 2009.
According to the document, “(Invacare) made promises to correct their violations in written responses to the August 2011 inspections, dated August 29, September 15, September 29, and October 28, 2011. None of these responses contained adequate evidence that (Invacare) have corrected their deviations.”
Violations noted during the August 2011 inspection were directly related to the manufacture of powered wheelchairs at Invacare’s Taylor Street facility, according to the FDA, including Invacare’s failure to “establish and maintain adequate procedures for implementing corrective and preventive action” and failure to “ensure that all personnel are trained to adequately perform their assigned responsibilities.”
On Dec. 15, 2010, the FDA also issued a warning letter to Invacare that referred to incidents involving Invacare electronic beds manufactured in Sanford, Fla., that caught fire.
The letter stated the company’s response was not adequate, and it may indicate “serious problems in your firm’s manufacturing and quality assurance systems.”
Mahoney said previously that none of the issues involving the Elyria plant or headquarters concerned malfunctioning products.
She said the incident involving the Florida plant was separate from the decree involving the Taylor Street plant and its Elyria headquarters, which addressed company-wide concerns.
There have been no recalls or safety issues involving Invacare’s products in relation to the decree, she added.
Mahoney said the company’s decision to sell its domestic medical supplies business, Invacare Supplies Group, was not due to the decree. She called the sell a “good strategic move” and said selling the Massachusetts-based business would not affect workers at the Elyria plant.
“This divestiture represents a significant step forward for Invacare and it allows us to continue to reduce the complexity in our business, focus on our core product lines and expand globally, with the long-term goal of returning operating margins back to high single digits,” said company President and CEO, Gerald Blouch in a news release from Invacare.
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