Abbott Labs CEO Discusses US Manufacturing Investment Amid Tariff Hikes

Abbott Labs CEO Robert B. Ford has announced investments of $500 million to boost US manufacturing in Illinois and Texas, with new sites to be operational by year-end. The company is realigning its capital to ensure resilient supply and capitalize on demand for its products. Ford states that the economics of making products in the US change by mitigating foreign exchange impacts and aligning cost and revenue structures. The investments are not driven by tariffs but by demand growth in the US and internationally.

Abbott Laboratories (ABT) has announced significant investments totaling $500 million to expand its manufacturing footprint in Illinois and Texas. The new facilities aim to be operational by the end of 2025, aligning with the company's strategy to enhance supply chain resilience and capitalize on growing demand for its products. The investments are not driven by tariffs but by the increasing demand for Abbott's products both in the U.S. and internationally [1].

The company's CEO, Robert B. Ford, emphasized that the economics of manufacturing in the U.S. have improved, reducing foreign exchange impacts and aligning cost and revenue structures. This strategic realignment aims to ensure a robust supply chain that can meet the growing demand for Abbott's products [1].

These investments follow Abbott's recent announcements of new manufacturing and R&D investments in the U.S., totaling $500 million, which will create 300 new American jobs. These investments are part of Abbott's broader strategy to increase its presence in the U.S., which currently has 35 manufacturing sites and 43 R&D sites in 15 states [1].

Abbott's focus on expanding its manufacturing capabilities in the U.S. is also driven by its success in the cardiovascular business. In the second quarter of 2025, Abbott's cardiovascular business reported double-digit organic sales growth, demonstrating the strong performance of its products in the market [1].

The company's recent investments in transfusion diagnostics manufacturing will also enable it to enter the molecular nucleic acid blood and plasma testing market, which is estimated to be worth approximately $1 billion. This market is crucial for ensuring the safety of recipients of blood component transfusions and plasma-derived therapies [1].

In the second quarter of 2025, Abbott reported a gross profit of $6.29 billion, an 8.9% year-over-year increase, despite a 5.4% increase in the cost of products sold. This led to a gross margin expansion of 79 basis points to 56.4%, driven by a favorable product mix shift toward higher-margin businesses, particularly within its Medical Devices segment [2].

These investments and strategic realignments position Abbott to capitalize on growing demand and maintain profitability despite macroeconomic headwinds. The company's focus on expanding its manufacturing capabilities in the U.S. underscores its commitment to ensuring a resilient and efficient supply chain.

References:
[1] https://www.todaysmedicaldevelopments.com/news/abbott-investing-in-us-manufacturing-to-power-health-tech/
[2] https://www.theglobeandmail.com/investing/markets/stocks/BSX/pressreleases/34423086/whats-driving-abbotts-gross-margin-growth-amid-macro-issues/