Pfizer layoffs detailed further

Kalamazoo Gazette ^ | Friday, September 26, 2003 | AL JONES

[FourPeas]

Pfizer layoffs detailed further

Friday, September 26, 2003

BY AL JONES
KALAMAZOO GAZETTE

Jobs in research and development accounted for all but about two dozen of the 459 positions Pfizer Inc. is eliminating in downtown Kalamazoo.

And a company spokesman said the job losses in the city of Portage, set at 329 to date, will eventually reach at least 500.

"We have said all along, there will be more separations (layoffs)," company spokesman Rick Chambers said. "And, yes, we have been keeping a constant dialogue with the city of Portage and all affected community officials."

According to a breakdown of the jobs affected by the pharmaceutical company's acquisition of Pharmacia Corp., which was provided by Pfizer to city of Kalamazoo officials last week:

• 168 of those who lost positions, or 36 percent, were midlevel professionals.

• 146, or 32 percent, were technicians or entry-level professionals.

• 93, or 20 percent, were managers or senior-level professionals.

• 49, or 10 percent, were hourly workers.

• Three, less than 1 percent, were classified as executives.

A list of more than three pages of eliminated jobs included six scientific posts held by senior fellows.

"When someone is a senior fellow, you're talking about someone with a Ph.D. with advanced studies. They also have significant recognition for the research they are doing on a national level," said Kalamazoo Mayor Robert Jones, who retired about six years ago from Pharmacia after more than 28 years with the company here. He was a supervisor in chemical production in Portage.

Referring to at least 37 senior-level professional positions listed, he said those involved highly skilled people with doctorates, advanced-studies degrees or other impressive credentials.

"They are extremely talented and outstanding researchers, and what that shows is the talent that is being displaced, and what type of talent we're talking about," said Jones, who has been among local and state officials working to create opportunities for displaced Pfizer workers to remain here.

Scientists in Pfizer's downtown Kalamazoo operation were primarily involved in the discovery and scientific development of treatments for central-nervous-system disorders and infectious diseases.

The layoffs are a result of Pfizer completing its acquisition of Pharmacia and undertaking a reorganization of its global operations. Even after the layoffs, Pfizer continues to be the largest employer in town, with a work force of about 6,000.

The details of the layoffs were identified as a federal WARN (Worker Adjustment Retraining and Notification) Act status report to the city of Kalamazoo. They were accompanied by a Sept. 17 letter from Robert W. Norton, Pfizer senior vice president for human resources, that complements a Sept. 16 company news release. The release sets the total number of Pfizer layoffs in Kalamazoo County at 863, with the city of Kalamazoo losing 459 of those jobs.

The WARN Act requires an employer to provide 60 days' advance notice of any major layoffs -- those involving 500 workers or more, or those that affect at least one-third of a facility's work force.

Chambers said the city of Kalamazoo, which had about 1,200 Pfizer workers, received notice because layoffs had reached the one-third threshold.

He said Pfizer has not issued a WARN status report to other Kalamazoo County municipalities because layoffs at its locations in Portage and Richland Township have not yet reached either the 500 or the one-third thresholds.

"We do expect we will reach the WARN threshold eventually," Chambers said of Portage, which has about 4,000 Pfizer workers. "When we do, we will provide the same information to the city of Portage."

Chambers said the company considers the 863 layoffs to be the majority of those that will occur here, although there will be more. And he said the research-and-development numbers in downtown Kalamazoo include support people, administrative people, and assistants as well as scientists.

He said Pfizer's medical-development group in Portage, housed in the No. 298 office building on Portage Road, has R&D workers who are likely to be affected.

"It's not new," he said this morning. "It's all related to the information from last week."

Of the 863 jobs being lost in the county, 58 were from Pfizer operations in Richland Township.

The company said another 200 workers transferred from the area to take jobs at other company locations.

Company officials said about 248 of its employees were transferring to the area to take jobs here, however, bringing the net loss of jobs in Kalamazoo County to about 800. But that number does not include contract workers who lost assignments with Pfizer. Technically, those people were not Pfizer employees. Pfizer has not released information on how many contract workers have been let go.

Before New York-based Pfizer released its report on Sept. 16, city officials derided the company for violating the WARN Act by failing to provide details to help them provide services for workers being laid off. The company, which said it would release numbers when they became available, refuted the allegation.

Jones said Thursday that city officials are moving past the squabble.

"We asked for the numbers. Now that we have the numbers, it is time for us to move on and take the community to where we want it to be," he said. "And that is a center for discovery research so that we are attractive to not only Pfizer but to any other pharmaceutical company that's looking for a hotbed of activity and growth for the future."

He added, "I'm happy that the company will end up with a lot less reduction and happy that they will be investing in our downtown."

In addition to the job numbers released last week, Pfizer announced plans to invest $12 million to upgrade its downtown facilities, $62 million to upgrade and build some new facilities at its Richland Township animal-health operation, and $108 million to maintain and upgrade its manufacturing and pharmaceutical-science operations in Portage.

Al Jones can be reached at 388-8556 or ajones@kalamazoogazette.com.

[FourPeas]

My father worked in pharmaceutical research for 15 years. Just over five years ago, he warned me that R&D in the pharmaceutical world was greatly decreasing. Obviously in a buy-out situation there will be some redundancy, however when he quit at Upjohn/Pharmacia the R&D department had already been decimated.

[CasearianDaoist]

Re your father: 1) Was that turn down international or just in the US? 3) Why did he think that this turn down of R & D was taking place?

[warchild9]

I've been laid-off twice from R & D jobs because of mergers. That's just a part of life, I guess.
What's going to hurt us is the Chinese taking aim at biotech, which is their next target. Glaxoetc. here in the Triangle is already talking offshoring Research and Development, with production to follow when the Reds can get their cGMP's up to speed. (For all you'uns who don't know, that means making their slaves do a proper job manufacturing pills and capsules.)

[FourPeas]

He predicted the downturn in the US R&D because government regulation, specifically patent lengths, caused it to be too expensive to bring new drugs to market. Because R&D and the drug approval process takes so long and costs so much, the prices of newly developed drugs will continue to rise. Consumers aren't about to pay those costs and the government will institute more regulations forcing the drug companies to sell the drugs cheaper. The drug companies, therefore, will develop fewer new drugs, chosing to pursue only those that have the potential for a large customer base. Drug companies (such as Upjohn/Pharmacia/Pfizer) have already ceased R&D on drugs where it looks like a competitor will come to market with an inferior drug that treats the same condition/disease.

[contessa machiaveli]

why are drugs manufactured by these companies charging less offshore (or do the governments subsidize production).

[FourPeas]

From what I hear, there are a variety of reasons. Part of it is subsidy, part each country's regulations and part is that they charge what each market can bear. All of these factors combine to put the burder on the US to essentially fund new drug research because we're paying the highest prices. As we in the US find ways to bring our prices down, we are, in effect, removing the funding for R&D.

It's a hard reality: do we continue to pay higher prices for drugs to continue to fund R&D, do we decide that this is a place for the federal government to step in and fund research, do we change the patent rules for pharmaceuticals to allow them to recoup costs over a longer period of time, do we decide that lower drug prices are worth a decrease in R&D, or do we do something else?

[CasearianDaoist]

Are there foreign competitors that do not do this I know that in Europe the price of drugs are capped?

[FourPeas]

I have no idea.