Pfizer Layoffs - The Ripple Effect

Pfizer Layoffs - The Ripple Effect
by Dave Hinz - Publisher
1/28/07


The recently announced layoffs of more than 10,000 employees nationwide, and 2400 jobs in Michigan, threaten to widen the unemployment woes experienced by that state. While Pfizer has stated that as many as 70 percent of those Michigan jobs will be transferred to facilities in Connecticut, the effects on the economy in Ann Arbor and Kalamazoo will be enormous.

Analysts suggest that the 2,100 jobs lost in Ann Arbor will create a ripple effect, causing up to 10,000 jobs lost in the immediate area.Businesses along that Plymouth Road corridor will be forced to lay off workers, and some may close. Two large strip malls across from the massive 2 million-square-foot Pfizer facility are expected to be hardest hit.

The University of Michigan North Campus complex, which has maintained a symbiotic relationship with Pfizer, along with the University Medical School Research programs at the University Hospital. The UM Hospital is a research hospital and teaching facility, with a close relationship to the pharmaceutical giant.

It has been predicted that the University might well have to lay off researchers of their own, cutting back drug research now under way in the Medical School.

Michigan Governor Jennifer Granholm has promised to lead an effort to find research jobs within the community among the nearly 100 small high tech research companies that have sprung up over the past few years. The Mayor of Ann Arbor, John Hieftje and University of Michigan President Mary Sue Coleman have called a meeting with community leaders
for Monday, to discuss options available. Among the topics under discussion are what to do with the 177-acre facility. It is seen as unlikely that another pharmaceutical company would be interested in the facility.

Similar efforts are under way in Kalamazoo where 250 jobs will be lost, affecting the community widely. The Kalamazoo facility was once the home of Upjohn Co, which has already faced sever cutbacks through the last decade as mergers within the pharmaceutical industry cost the area jobs.

The economic losses are expected to skyrocket into the hundreds of millions of dollars, as businesses are forced to close, and the city and state face tax losses. Unemployment claims, already among the highest in the nation, are expected to climb as well.

Ann Arbor residents fear a housing glut as well, as those homeowners promised jobs in other states attempt to sell their homes. Washtenaw County is already has one of the highest costs of living in the state, with property values well above the average. Residents fear that a large number of unsold homes, or homes in foreclosure will drive the values of their own property downward.