BY WALTER NOWINSKI
Daily Staff Reporter
Published January 23, 2007
In a devastating blow to the city and region, Pfizer Inc. announced yesterday that it would close its massive Ann Arbor research and development facility - eliminating 2,100 jobs.
At a hastily convened press conference this afternoon in the Michigan Union, Mayor John Hieftje joined University President Mary Sue Coleman and Gov. Jennifer Granholm and other elected officials to address the job cuts.
University officials said the announcement will not have a dramatic effect on University research. Over the last three years, Pfizer contributed about $12 million of the University's roughly $800 million research budget.
Stephen Forrest, the University's vice president for research, said in an interview with The Detroit Free Press that Pfizer wouldn't necessarily cut off research funding simply because they were no longer in Ann Arbor.
In addition to funding research, Pfizer supported a few fellowships and had several joint training programs with the University, he said.
Many students had internships at Pfizer that may now be in jeopardy. In an interview after the press conference, Coleman said the University would have to work with local leaders, economic development groups and small startups to replace the lost internship opportunities.
"Having an internship in a smaller company might be as good as or a better experience for a student as having one in a big company like Pfizer," Coleman said.
She emphasized that it's important for the University to work with the city, state and industry to move on.
"We need to make sure we are doing everything we can to turn this crisis into something that is positive for the community," Coleman said.
At the press conference, Hieftje spoke candidly about what the loss of Pfizer, the world's largest pharmaceutical company, would mean for Ann Arbor. He said that the disappearance of the city's largest taxpayer would have an impact on property tax levels in the city and would hurt the city's schools.
Still, he cautioned against despair.
"This is certainly a blow to the city, but it is not one from which we cannot recover," he said.
Pfizer paid $13 million to the city's coffers in 2006, more than 4 percent of Ann Arbor's property tax receipts.
While the University is the largest landowner in the city, it does not pay property taxes because it is a public institution.
Pfizer was also one of the largest charitable givers in the city, supporting the United Way, youth programming and the University Musical Society.
Pfizer was the largest non-University employer in the city and had recently invested heavily in upgrading and expanding its sprawling Ann Arbor research labs, which abuts the eastern edge of North Campus.
But despite Pfizer's massive physical presence in Ann Arbor, Granholm said the firm's real assets were the skilled employees who worked there. She said she was determined to keep those skilled employees in Michigan.
At about 1 p.m. yesterday, nine Pfizer employees gathered at Ashley's Pub on State Street to discuss the news over lunch and a drink.
Pfizer instructed employees not to speak with reporters, and none of the group gathered at Ashley's would comment.
"We are going to have a whole stick-around-Ann-Arbor campaign for those employees, because we want them to stay," Granholm said.
The loss of Pfizer was particularly painful for Granholm because biomedical research was one of the fields that she was hoping to foster as a way to diversify the state's economy as the once-dominant automotive industry continues to struggle.
With a low unemployment rate and the promise of new industries like Google moving into the area, Ann Arbor had been one of the few economic bright spots in the struggling state.
But the loss of thousands of high-tech jobs yesterday cast doubt on the city's economic future.
"We are in the same boat as the rest of the state of Michigan," Hieftje said at last night's City Council meeting.
Granholm said Pfizer's decision was part of a global restructuring and had nothing to do with the local labor pool, the state's taxes or the state's business climate.
"There is nothing Michigan could have done to prevent this from happening," she said.
Pfizer officials announced the closure of the Ann Arbor plant yesterday morning as part of a larger restructuring. The firm, which has not introduced any blockbuster drugs since Viagra in 1998, is losing market share to generic drugs. Many of its patents are set to expire over the next five years.
It aims to shed 10 percent of its global workforce by 2008. In addition to the Ann Arbor facility, Pfizer will close two plants and four research facilities in the United States, Japan and France.