Pfizer ‘Milks’ New York City For Big Tax Breaks
5 CommentsBy Ed Silverman // March 5th, 2008 // 7:45 am
Last year, Pfizer announced it was laying off 600 workers and ending production at the historic Brooklyn factory where the company was founded back in 1849. The last employee at the Williamsburg plant will be gone by the end of this year. Yet, writes a columnist for The New York Daily News, the drugmaker is milking New York City for lucrative tax breaks by promising to create jobs - only to turn around and cut its workforce.
Four years ago, Pfizer signed an agreement for nearly $10 million in tax breaks with the administration of Mayor Michael Bloomberg. In return, the company promised to increase total employment at its Manhattan headquarters and its Brooklyn plant (see photo) from 5,735 to 8,659. In 2004 alone, the first year of the agreement, Pfizer was supposed to add 1,000 jobs, columnist Juan Gonzalez writes.
How well did it do? In 2007, Pfizer employed 199 more people than it did when it signed the deal, according to a report the company filed with the New York City Economic Development Corp. That’s 20 percent of what it promised, Gonzalez writes. Actually, the drugmaker moved 1,000 jobs into its Manhattan headquarters from out of state, but then cut hundreds of other workers in the city, EDC spokeswoman Janel Patterson tells the News.
Once the remaining employees at the Brooklyn plant are gone, the head count may be less than when the agreement began. Last September, Pfizer quietly informed EDC it wouldn’t be meeting its goal. The city then suspended the deal. By then, he notes, it was too late: Pfizer had received virtually all the tax breaks. The Bloomberg administration, which has long promised to end such corporate welfare, says it has no intention of asking for taxpayer money. “Because the loss of employees is due to layoffs and not relocations out of the city, no penalties have been assessed,” Patterson says.
RTW
Why should this be a suprise at all. Pfizer did the same thing to Ann Arbor, Mi. Only to close the facility there.
NovaCog
You think NYC would look into to see if ALL the layoffs were true layoffs. Maybe some of the favorites got moved to Groton and they can get Pfizer that way.
I guess Groton did not give them the same deal. Pfizer closed Groton manufacturing and that went to Singapore
Jack
Subject: FW: Pfizer in the News
PFIZER TO CUT WORKFORCE 120 PERCENT
NEW YORK, N.Y. (AP.com) - Pfizer will reduce its workforce by an
unprecedented 120 percent by the end of 2008, believed to be the first
time a major corporation has laid off more employees than it actually
has.
Pfizer stock soared more than 12 points on the news.
The reduction decision, announced Wednesday, came after a year-long
internal review of cost-cutting procedures.The initial report concluded
the company would save $1.2 billion by eliminating 20 percent of its
108,000 employees.
From there, said a spokesperson, “it didn’t take a genius to figure out
that if we cut 40 percent of our workforce, we’d save $2.4 billion, and
if we cut 100 percent of our workforce, we’d save $6 billion. But then
we thought, why stop there? Let’s cut another 20 percent and save $7
billion.
“We believe in increasing shareholder value, and we believe that by
decreasing expenditures, we enhance our competitive cost position and
our bottom line,” he added.
Pfizer plans to achieve the 100 percent internal reduction through
layoffs, attrition and early retirement packages. To achieve the 20
percent in external reductions, the company plans to involuntarily
downsize 22,000 non-Pfizer employees who presently work for other
companies.
“We pretty much picked them out of a hat,”.
Among firms Pfizer has picked as “External Reduction Targets,” or ERTs,
are Quaker Oats, AMR Corporation, parent of American Airlines, Lockheed,
Boeing, and Charles Schwab & Co. Pfizer’s plan presents a “win-win” for
the company and ERTs, said Chris, as any savings by ERTs would be passed
on to Pfizer, while the ERTs themselves would benefit by the increase in
stock price that usually accompanies personnel cutback announcements.
“We’re also hoping that since, over the years, we’ve been really helpful
to a lot of companies, they’ll do this for us kind of as a favor,”.
Legally, pink slips sent out by Pfizer would have no standing at ERTs
unless those companies agreed. While executives at ERTs declined to
comment, employees at those companies said they were not inclined to
cooperate.
“This is ridiculous. I don’t work for Pfizer. They can’t fire me,” said
Kaili Blackburn, a flight attendant with American Airlines.
Reactions like that, replied the Pfizer spokesperson “are not very
sporting.”
Inspiration for Pfizer’s plan came from previous cutback initiatives,
said company officials. In January of 1998, for instance, the company
announced it would trim 18,000 jobs over two years. However, just a year
later, Pfizer said it had already reached its quota. “We were quite
surprised at the number of employees willing to leave Pfizer in such a
hurry, and we decided to build on that,”.
Analysts credited the short-term vision, noting that the announcement
had the desired effect of immediately increasing Pfizer’s share value.
However, the long-term ramifications could be detrimental, said Bear
Stearns analyst Beldon McInty.
“It’s a little early to tell, but by eliminating all its employees,
Pfizer may jeopardize its market position and could, at least
theoretically, cease to exist,” said McInty.
The spokesperson, however, urged patience: “To my knowledge, this hasn’t
been done before, so let’s just wait and see what happens.”
Atlex
NovaCog, four years ago Pfizer had about 110K employees. Now they have 86K. There have definitely been signficant layoffs in NYC, the US and worldwide. It doesn’t excuse the situation in NY, but does help put it in context.
greg
Well, it looks as if Pfizer is just as successful in screwing over New York as they at screwing over the federal government by selling their medications off label to government run programs