Published: May 13, 2008 11:59 pm            

Pfizer to shutter Vigo plant

Final 140 jobs will be gone by mid-2009, joining more than 600 cuts announced earlier this year

TERRE HAUTE — Pfizer Inc. will shut down its Terre Haute plant by mid-2009 and put its manufacturing site up for sale.

“We don’t have any other products to put here,” Pfizer spokesman Rick Chambers said Tuesday.

“We will look at whether or not there are parties out there interested in buying it. We will be exploring that,” Chambers said.

The closure will complete a total loss of nearly 800 jobs at Pfizer since 2007. Pfizer had previously announced it would keep 140 workers through the end of this year, yet local officials had hoped Pfizer could bring in a new long-term use for its facility.

As of April 2007, Pfizer had 764 people working at its plant, located adjacent to the Vigo County Industrial Park south of Terre Haute, with an annual payroll of about $47.8 million. The company had planned to increase that to 787 jobs with an annual payroll of about $49.2 million later in 2007, according to tax abatements the company had sought and obtained from the County Council.

In October, the company announced it had pulled the plug on production of Exubera, an inhaled insulin to treat diabetes, resulting in the loss of 660 jobs. Pfizer began permanently cutting those jobs in March.

The 140 employees still working at the plant manufacture antibiotics Unasyn and Pfizerpen.

“We will be spending the next almost a year building up inventory to manage what very small demand there is in the U.S. for these particular products,” Chambers said.

“That will take us probably in through the first quarter of 2009 and then we will be ramping down the operation during the second quarter,” Chambers said. “In the meantime, there is no reason at all why we can’t start aggressively looking at other options for the site and that is exactly what we will be doing.”

Nat Ricciardi, president of Pfizer Global Manufacturing, said in a company release, “Because of generic competition, demand for the antibiotics we make in Terre Haute has been declining for many years.

“After careful review, we made the decision to cease operating in Terre Haute. This decision is not a reflection on our highly skilled colleagues nor on the community of Terre Haute. It’s simply a business reality that we must address,” Ricciardi added.

Frank Foley, Pfizer Terre Haute site leader, said the plant’s workers will have access to internal job postings, job search tools, career and retirement counseling, and severance benefits for those who leave the company.

Steve Witt, president of the Terre Haute Economic Development Corp., said his agency “will work closely with Pfizer personnel that are charged with the divestiture of Pfizer’s excess properties and see if we can team up to market that property and bring some prospective new occupants that can create some jobs there.”

Witt said Pfizer also has been in contact with the Indiana Economic Development Corp., which also will work to market the site.

Witt said the Terre Haute EDC constantly is working to bring in new employment opportunities to Vigo County.

“Whenever we have a major job loss like this, it has ramifications in a number of areas such as tax revenues, assessed valuation and can even affect charitable organizations like the United Way,” Witt said.

Pfizer had been improving and expanding its facility since 1999 to prepare for Exubera production, investing more than $300 million.

The County Council in September 2005 awarded a tax abatement for “phase III” improvements for Exubera production, of which more than $30.7 million in abatement was still applied to the company’s 2007 taxes, according to county records.

For 2007, Pfizer paid $142,304 in real property taxes and an additional $99,777 in personal property taxes. The company had additional abatements applied in 2007 of more than $2.55 million for real property and more than $6.47 million in personal property taxes, plus a personal property investment deduction of $2 million, county records show.

In 2007, Pfizer obtained tax abatements of $15 million to $23 million for real property improvements and between $100 million and $169 million for new equipment. Much of those abatements would not apply until taxes paid in 2009, but most likely would not be applicable as the company will cease operations, said Vigo County Auditor Jim Bramble.

In addition, county officials last year approved a $4.52 million tax increment finance, or TIF, bond to pay for water line upgrades and road repairs, including new intersections along Carlisle Road for Pfizer. Official since have used more than $3 million of that for construction of the county’s Canal Road project that links to the 641 bypass.

The county’s Economic Development Income Tax (EDIT fund) serves as backup to secure the 15-year bond through 2021. “Those bonds were guaranteed with EDIT money and now future EDIT money will pay for that, which will have a negative impact on the use of that money for other projects,” Bramble said.

“Everybody knew that Exubera wasn’t selling, yet the TIF bond was still approved. There were no guarantees of getting something in return. Now the public is stuck with nothing to show for it,” Bramble said.

Witt said Vigo County has structured economic development deals before where companies, such as CertainTeed and Staples, provide the security for TIF payments, “but that did not work that way for Pfizer,” he said, declining specifics.

Witt said the TIF money is still benefiting the county as it is being used for the Canal Road project, which most likely would have required a bond to pay for the new road, he said.

Howard Greninger can be reached at (812) 231-4204 or howard.greninger@tribstar.com.

        

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