It has been more than 120 years since physician and pill pioneer W.E. Upjohn founded a company in his native city that would become one of the nation's largest drug makers.

Although The Upjohn Co. no longer exists, the pharmaceuticals industry remains a major employer in the Kalamazoo area, where Pfizer Inc. has about 3,200 employees.

On Tuesday, Pfizer, the world's largest drug company, plans to dedicate a newly renovated, 780,000-square-foot laboratory and office facility in downtown Kalamazoo that Upjohn built in the early 1990s.

The $75 million project will house 680 employees and serve as the global headquarters of Pfizer's veterinary medicine research and development and animal genetics operations. Besides accommodating recent moves to the area by Pfizer veterinary medicine researchers from England and Louisiana, it also consolidates most laboratory and all office functions from operations in Kalamazoo and nearby Richland Township.

 

About $58 million went toward to cost of renovating existing work spaces and expanding into previously unused areas of the building. The remaining $17 million was spent on some of the latest research and testing equipment available to drug companies, including a state-of-the-art mass spectrometer to help identify proteins in genetics research.

"We're very, very fortunate to have the Upjohn legacy continue to prop our economy, undergird our economy here in Kalamazoo," says City Manager Kenneth P. Collard.

While Michigan recorded an unemployment rate of 12 percent in February, the city of Kalamazoo had a 12.2 percent jobless rate that month, the most recent for which county-by-county figures are available. But it has had some success attracting high-tech and life-sciences companies after losing hundreds of Pfizer jobs over the years.

Other Michigan cities have been less fortunate with Pfizer's restructuring decisions following the company's acquisition of Pharmacia Corp. six years ago.

New York City-based Pfizer announced in 2007 that it was shutting down its human health research and development facility in Ann Arbor, where it had 2,100 workers and was the city's largest private employer.

At the same time, the company announced that it was cutting 250 jobs in downtown Kalamazoo and 60 more in western Wayne County's Plymouth Township.

Many of the affected workers were offered jobs elsewhere at Pfizer, outside of Michigan.

In March 2005, Pfizer said it was closing a manufacturing plant with 328 employees in Ottawa County's Holland Township.

Pfizer had 9,000 employees in Michigan immediately after its April 2003 acquisition of Pharmacia, which had merged with Upjohn in 1995. Its work force in Kalamazoo County -- including the cities of Kalamazoo and Portage, and Richland Township -- has been halved, from 6,400 to 3,200.

"Really, Pfizer's presence in Michigan has become much more focused," company spokesman Rick Chambers says. "The manufacturing site in Portage and Kalamazoo is Pfizer's largest manufacturing operation in the world."

Its huge Portage facility makes medications for humans and animals and active pharmaceutical ingredients. The smaller Kalamazoo plant makes alcohol-based medicines.

Pfizer also operates a 2,100-acre research farm in Richland Township.

The Pfizer presence in the area extends beyond its own doors.

A number of former Pfizer and Pharmacia employees are involved in the more than two dozen life-sciences businesses that have been hatched at the Southwest Michigan Innovation Center since it opened in July 2003. The center is a business incubator at the Western Michigan University Business Technology Research Park in Kalamazoo.

In May 2007, Pfizer and Michigan State University announced that the company was giving the school a now-shuttered laboratory next to Pfizer's closed production plant in Holland Township, just north of Holland.

The university is to use the 138,000-square-foot, $50 million lab as an applied bio-economy research center for studying economic sectors that use biological resources. It will employ about 100 people when fully operational.

Meanwhile, the University of Michigan announced in December that it plans to buy Pfizer's former campus in Ann Arbor for $108 million. The school says its investment will create at least 2,000 research and other jobs over the next decade.

The 174-acre campus has almost 2 million square feet of laboratory and office space that the university says will allow it to expand its research in health, biomedical sciences and other fields.

Steve Forrest, vice president for research at the university, says he expects the school to close on the property in June.

As for Pfizer's decision to hold onto and renovate its Kalamazoo building, company officials express confidence that they have done the right thing.

"We're very proud of the scope of investment that we've made," says Dr. Katherine Knupp, vice president, veterinary medicine research and development.

 

By James Prichard | AP Business Writer

 

Source: Chicago Tribune