Borders' liquidation, Pfizer's exodus add up for Ann Arbor: 5,000 jobs gone

Posted on Thu, Jul 21, 2011 : 5:58 a.m.

Borders' liquidation, Pfizer's exodus add up for Ann Arbor: 5,000 jobs gone

By Nathan Bomey

A display in the lobby of Borders Group Inc.'s corporate headquarters in Ann Arbor greets nearly 400 workers who still work there.

Melanie Maxwell | AnnArbor.com

Borders Group Inc.’s announcement Monday that it plans to liquidate marks the single biggest blow to the local economy since Pfizer Inc. announced in January 2007 that it would close its Ann Arbor pharmaceuticals campus.

Nearly 5,000 local jobs at the two companies — about 3,000 jobs at the height of Pfizer's Ann Arbor operation in the early 2000s and nearly 2,000 jobs at the height of Borders' Ann Arbor headquarters and three local superstores — are now history.

Borders employs about 400 workers at its Ann Arbor headquarters. At one point, the company employed about 2,000 workers in Washtenaw County, including about 1,800 at its headquarters.

Pfizer's decision to abandon its Ann Arbor campus displaced more than 2,100 workers. The company employed 3,000 people there at its height.

Lon Horwedel | AnnArbor.com

The 400 people still working at Borders’ headquarters on Phoenix Drive will lose their jobs — and the two remaining Washtenaw County stores will close.

With Borders' exodus, two major corporations that once defined Ann Arbor's private sector identity are gone.

But there’s a distinct difference between Borders’ liquidation and Pfizer’s exodus. Borders’ plans caught no one off guard — in contrast with Pfizer’s decision, which caught everyone by surprise, even the company’s local site director, David Canter.

“The (Borders) outcome is certainly not a surprise,” said Michigan Economic Development Corp. CEO Michael Finney, who was CEO of Ann Arbor SPARK when Pfizer announced that it would displace more than 2,100 workers four years ago.

“They made every effort they could to keep the company going. We have to take an approach very similar to what we did with Pfizer and see if there are opportunities for some of the innovation that was going on inside of Borders to remain in the community.”

When Pfizer exited, economic development leaders immediately launched an effort to provide resources to the scientists and employees at Pfizer to help them launch businesses or find jobs at local companies. In the end, SPARK estimated that about one-third of the workers stayed in the area, and two dozen startups sprouted in the aftermath of Pfizer’s exodus.

That said, Borders is different. Borders — whose liquidation plan is expected to be officially approved today by a New York bankruptcy judge — has a different mix of workers.

And the company has always been fairly isolated from the local economy. That is, there’s no substantive publishing industry in Ann Arbor.

Nonetheless, many Borders corporate employees have the skills to fit comfortably into various local industries, Finney said.

“There’s a lot of very high-quality professionals in the (information technology) space, in sales and marketing and so many other very worthwhile professions,” he said. “It’s like every other business. There’s a tremendous amount of talented folks who could, in fact, potentially fit into other companies or do their own thing.”

Among the resources for the Borders workers is SPARK’s entrepreneurial training courses, consulting services, networking opportunities and job listings. MEDC also recently launched a “job portal” with job listings at hiremi.org.

Borders liquidating

“It’s always unfortunate when a business in our region experiences hardship,” said Donna Doleman, SPARK’s new vice president for marketing, communications and talent. “So what’s important to the economy and the region is how we handle those hardships and that we’re prepared for them when they inevitably occur.”

Doleman said SPARK is already working with Borders’ human resources team to provide an “array of services” to the workers. One of SPARK’s key services is a free weekly e-mail newsletter with job openings in the Ann Arbor area, which can expose workers to growing companies they did not know about.

“The bottom line for us is we don’t want to lose the talent,” Doleman said. “We’re going to apply the same effort and expertise we did with the Pfizer transition.”

Borders President Mike Edwards said in a letter to employees that they could expect information later this week "regarding separation information, severance, benefits, and other resources for employees."

"You have my assurance that we will do whatever we can to help our employees through this transition," he wrote.

To be sure, rapid growth at the University of Michigan Health System — which is adding 500 jobs in connection with the November opening of its new children’s and women’s hospital — and job growth in the tech sector are likely to help the economy absorb the Borders losses.

But the liquidation deals a substantive blow to the pace of the local economy’s recovery. Washtenaw County was expected to add about 2,090 jobs in 2011, according to an economic forecast released in March by the University of Michigan.

Nationally, Borders’ liquidation is a significant moment, too. The company’s 10,700 workers will lose their jobs, and 399 stores will be abandoned — unless last-ditch efforts to sell 30 leases are approved by a judge today. Borders leased all of its real estate — which means that landlords will be left seeking tenants for their stores.

The company owed its top seven unsecured creditors, including publishers such as Simon & Schuster and Random House, more than $193 million, according to court documents from Borders’ Chapter 11 bankruptcy filing in February.

In Ann Arbor, the company was leasing space for its headquarters in a 460,000-square-foot office building owned by Agree Realty. But Borders only occupied about 25 percent of the building in the end.

The company's exodus from the headquarters building is a disappointing development — but it also creates an opportunity for attracting new corporate tenants and filling up the space.

After all, Pfizer, of course, sold its property to U-M for $108 million — and U-M expects to add 3,000 jobs at the site by 2019.

For now, though, the focus is on the impact of Borders' liquidation on its employees. It's unclear when Borders' headquarters employees will be laid off. At the stores, liquidation sales could start as soon as Friday.

Patricia Denig, interim director of the Washtenaw office of Michigan Works!, said her office is meeting today with Borders' human resources team to help workers apply for unemployment insurance, access retraining and certification course opportunities and identify new career opportunities.

Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.

Comments

Greg Gunner

Thu, Jul 21, 2011 : 9:26 p.m.

More evidence that trickle down economics just doesn't work. Since 2000 the burden has been placed upon the working class, and as a result they have little to spend. When will the Republicans realize that taking money away from the working class to line their own pockets results in a struggling economy. If you have little to no money available for discretionary spending because of Slick Rick and the Republican agenda, then you won't be spending money on books, CD's, and other items that are recreational expenses. No available money=No spending, period.

kdadnick

Sat, Jul 23, 2011 : 1:19 p.m.

Do you seriously believe Border's is closing because "the working class" doesn't have enough money to spend on books? Perhaps you should look at the hobbies, "toys", and lifestyles of middle class Americans before trying to draw this conclusion. There are, without argument, a lot of people who are struggling. I am not questioning that nor making light of it. However, how many people, if given $100 to spend on any non-essential item, would be delighted that they could now afford a new book?

Edward R Murrow's Ghost

Thu, Jul 21, 2011 : 6:33 p.m.

I wonder if the state's crumbling infrastructure, its declining K-12 budgets, and the fact that it spends more on prisons than on higher education has anything to do with the fact high-tech, knowledge-based firms appear to be leaving this state like rats jumping off the Titanic? Naaaaaah. Couldn't have anything to do with it. Good Night and Good Luck

Edward R Murrow's Ghost

Thu, Jul 21, 2011 : 9:58 p.m.

There's a worthy goal for the state. Good Night and Good Luck

jns131

Thu, Jul 21, 2011 : 8:07 p.m.

Could make Michigan a prison state. At least we will have federal funding all the time and Snyder can handle a minimum budget. Just a thought.

Peter

Thu, Jul 21, 2011 : 5:32 p.m.

You guys sure do love SPARK. I see that's already a topic of conversation though.

say it plain

Thu, Jul 21, 2011 : 6:02 p.m.

I know lol, it's kind of funny, or would be, if it weren't so pathetic. This piece looks like an in-house promo bit from SPARK. Oh, yes, we've lost some jobs, but good thing SPARK exists, because that will soften the blow and make everything right lol.

jns131

Thu, Jul 21, 2011 : 4:58 p.m.

First came Pfizer. Then came Borders. Now Riders. Three businesses that were of the private sector closing or closed and another end of an era. Wasn't Borders family owned as well? Sad. Guess there goes more children out of the pockets of Ann Arbor schools. Pfizer took close to 500 or more children. If Borders is closing and laying off 5,000, would that mean at least 800 or more children leaving the district as well? I would love to hear the stats on that one. Good luck to Border employees. Finding a job in this economy is tough.

Tom Teague

Thu, Jul 21, 2011 : 7:22 p.m.

That's not an impending loss, it's a cumulative loss over many years. According to the article, about 400 employees work at Borders HQ; I didn't see a figure for the two stores' employee headcount. The 5,000 figure was the combination of 3,000 lost jobs from Pfizer and 2,000 lost jobs from Borders when each was at its peak employment. Pfizer was not at that peak when it closed the Ann Arbor facility four years ago; it has been a while since Borders was at peak as well.

15crown00

Thu, Jul 21, 2011 : 4:30 p.m.

those jobs are gone NEVER to be back.Maybe Ann Arbor isn't all that after all. That's the way it is Thursday July 21, 2011.

Alan Goldsmith

Thu, Jul 21, 2011 : 4:27 p.m.

"SPARK won't let you look at its audits after taking your tax money. It claims it's a 'private' non-profit (running substantially on public money). What are they hiding? What are they afraid of?" Why doesn't AnnArbor.com look into this issue?

John B.

Thu, Jul 21, 2011 : 9:02 p.m.

Because they are one of Rick's (and really any big business') primary cheerleaders.

Townie

Thu, Jul 21, 2011 : 4:19 p.m.

SPARK won't let you look at its audits after taking your tax money. It claims it's a 'private' non-profit (running substantially on public money). What are they hiding? What are they afraid of? But then again AA.com will never ask for the audit and make it public or write anything more than puff pieces. Beyond the audit -- their job creation figures are just made up and not audited by anyone independent. Great work if you can get it. Pretend to be 'private', take lots of public money, produce little or nothing and act as a nice place for 'retired' politicians to go and launch their next political campaigns while we taxpayers pay their way. Then they come back and tax us again.

Alan Goldsmith

Thu, Jul 21, 2011 : 4:11 p.m.

Oddly enough, no articles on AnnArbor.com this morning on the increase in the State of Michigan's unemployment rate which all the other media outlets are reporting. I'm not surprised.

Bogie

Thu, Jul 21, 2011 : 3:53 p.m.

SPARK just sounds like another one of those government subsidized programs, that produce nothing. I wonder if you walked into their office right now; what would you see? I am hopeful that the state will not be losing companies, that are prosperous (Pfizer) anymore. It seems that we have a more pro business government now. Consequently, I do hope the leglislature look at programs like SPARK, and ask the question, "Are they working?"

Roger Roth

Thu, Jul 21, 2011 : 3:14 p.m.

Stephan Hancamp asks, "Given this story, is it OK to now conclude that the Granholm experience failed miserably?" One possible reply: Sure, if you want to. Snyder's been in office 6 months. It took Boehner about a month to ask Obama, "Mr. Obama, where are the jobs?" Should we have blamed joblessness on 8 years of Bush? If you blame Granholm then, in fairness, it would seem to me, in a stretch, that there could exist the possibility, albeit slim, that, using the same distorted and otherwise twisted reasoning, you could blame Bush. Doesn't matter to me. I do have to concur with Boehner though (who wants every kid to have "a shot at the American Dream" ((which for all we know, in Boehner's mind, could now mean a tent with bunks, a used Yugo, dirt roads and long lines in the ER. Food? Check the dumptster outside the country club or capitol bldg.:)) "Mistah Snyda, where are the jobs??" The truth probably is couched in something DDE (I think) said about a half-century ago: "We have to wait for the rest of the world to catch up." Little did we know then just how painful this was going to be in 2010. I muse that maybe he didn't even realize. Could he have predicted job outsourcing? I could respect Snyder for promoting austerity but for two reasons: 1) He's rich and austerity means nothing to him (he's living The Dream) and 2), his austerity means whack those already whacked plenty and can least afford the hit while favoring Corps. who in this recession are rolling in cash.

Roger Roth

Thu, Jul 21, 2011 : 7 p.m.

No, I see I didn't. I'm sorry about that too. Here's what I'm going to do. I'm going to correct the post: Stephen Hankamp asks, "Given this story, is it OK to now conclude that the Granholm experience failed miserably?" One possible reply: Sure, if you want to. Snyder's been in office 6 months. It took Boehner about a month to ask Obama, "Mr. Obama, where are the jobs?" Should we have blamed joblessness on 8 years of Bush? If you blame Granholm then, in fairness, it would seem to me, in a stretch, that there could exist the possibility, albeit slim, that, using the same distorted and otherwise twisted reasoning, you could blame Bush. Doesn't matter to me. I do have to concur with Boehner though (who wants every kid to have "a shot at the American Dream" ((which for all we know, in Boehner's mind, could now mean a tent with bunks, a used Yugo, dirt roads and long lines in the ER. Food? Check the dumptster outside the country club or capitol bldg.:)) "Mistah Snyda, where are the jobs??" The truth probably is couched in something DDE (I think) said about a half-century ago: "We have to wait for the rest of the world to catch up." Little did we know then just how painful this was going to be in 2010. I muse that maybe he didn't even realize. Could he have predicted job outsourcing? I could respect Snyder for promoting austerity but for two reasons: 1) He's rich and austerity means nothing to him (he's living The Dream) and 2), his austerity means whack those already whacked plenty and can least afford the hit while favoring Corps. who in this recession are rolling in cash.

Roger Roth

Thu, Jul 21, 2011 : 6:56 p.m.

I take full responsibility for misspelling your name, and I apologize for that. Thank you for calling it to my attention. As for the other part of your response, I can't answer it. You may decide. BTW, I did spell your first name correctly!

Michigan Man

Thu, Jul 21, 2011 : 3:18 p.m.

Roger - You have not spelled my last name correctly - Hankamp, NOT Hancamp - what other mistakes did you make in your comment?

Michigan Man

Thu, Jul 21, 2011 : 1:28 p.m.

Given this story, is it OK to now conclude that the Granholm experience failed miserably?

eagleman

Thu, Jul 21, 2011 : 2:57 p.m.

This has nothing to do with Granholm. It isn't her fault that Borders had an antiquated business model. While I found her to be an ineffective governor, I also realize that she was dealing with issues that were way beyond her ability to impact.

Tom Whitaker

Thu, Jul 21, 2011 : 1:10 p.m.

Say, whatever happened to the disclaimer that used to be posted on all SPARK propaganda pieces on this site? You know, the one about annarbor.com's executive vice-president being on SPARK's board of directors? If not for a 3800-person increase in the size of the UM student body, Ann Arbor's population would have decreased by almost 4000 people during the past decade. Our total population has increased, on average, by less than 1% per year for several decades. UM is cutting back on freshman enrollment this year. So why is it that our local government has been, and continues to be on a massive capital project spending spree, apparently anticipating a population explosion? The list includes: A doubling of City Hall, a huge underground parking structure, a new fleet maintenance facility, another huge parking structure in Fuller Park, a $1,000,000 fountain, a $6,000,000 materials recovery facility (big enough to handle material from dozens of other communities), a huge expansion of the sewage treatment plant (coming soon, and again, big enough to handle waste from a population WAY larger than Ann Arbor will likely ever have), and a $500,000,000 mass transit expansion plan. (And let's not forget a recent $2,000,000 give-away to a developer to build more apartments to house this fantasy population boom.) I'm all for being optimistic about the future, but this is ridiculous.

blahblahblah

Thu, Jul 21, 2011 : 4:59 p.m.

Well said, I guess they are living up to the whole "28 miles surrounded by reality" thing. Definately feels like were living in a parallel universe.

Cash

Thu, Jul 21, 2011 : 1:30 p.m.

Ah yes, the infamous disclaimer....what did happen to that? Why even bother any more? Mr Whittaker, thank you for a brilliant post. You hit the nail on the head.

jhammer

Thu, Jul 21, 2011 : 12:50 p.m.

May I assume that Ann Arbor is joyful about corporate America leaving? Big corporations are blood sucking, profit-driven and evil, so this is all good news, right?

Tom Joad

Thu, Jul 21, 2011 : 12:09 p.m.

The Gilded Age meets the Age of Austerity. Tens of millions of jobs lost in the new economic reality of overpopulation, over consumption, resource depletion and permanent welfare state.

Mr Blue

Thu, Jul 21, 2011 : 12:40 p.m.

I find it amusing that someone who uses the non de plume Tom Joad complains about a welfare state.

xmo

Thu, Jul 21, 2011 : 11:43 a.m.

I hope that the Ann Arbor City Council and residents of AA2 change their attitude about business. We need to activity seek out and make Ann Arbor Friendly to business. We have the land and a talented work force now we just need a loving and caring local government!

say it plain

Thu, Jul 21, 2011 : 6:10 p.m.

We were very nice to Pfizer, as I recall. We were very nice to Google, also. We assumed that both would be very happy to stay, and we assumed that both would be booming. I don't see what it has been about our particular attitudes that have caused us to lose out here--these were just industries going through big changes/ taking big risks. Pfizer had a bunch of blockbusters go off patent, and their work on new drugs to push didn't pan out. Big Pharma had to cut back some, and we lost for a variety of reasons that I think had to do more with *their* business than with our support levels. Borders just screwed up, and so we lose because we were where they started off...all in-house screwing-up, no help from AA. Google thought they were going to sell sell sell adwords, and the economy tanked and advertising budgets dried up, again no apparent lack of support from AA factoring in to their failure to come up with all the jobs. I don't get how we're stopping businesses, aside from trying to stem the tide of overdevelopment of real estate/retail ventures, and in that we should be happy we avoided some of the truly massive overbuilding/over-betting that has happened elsewhere during the boom RE years of the noughties....

eagleman

Thu, Jul 21, 2011 : 2:51 p.m.

But business is evil, don't you know?

ez12c

Thu, Jul 21, 2011 : 11:43 a.m.

Ann Arbor commentors are always amusing. On one hand nothing to do but complain about the companies that want to grow and expand into the area and doing everything possible to make it impossible and on the other hand, complaining about lousy jobs around here. Look people, if you want to attract industry don't "zoning restrict" them away. As far as UofM, yeah that's a big corporate giant that we wish would just go away too. Get real. Go visit any developing metro area and see what they have that Ann Arbor doesn't. It's people working together; universities, corporations, government and small business all helping each other.

Cash

Thu, Jul 21, 2011 : 1:27 p.m.

LOL I can't wait to hear how posters are responsible for zoning in Ann Arbor. First a poster should be doing Mike Finney's job and next they should rezone Ann Arbor. Hilarious!!!

deb

Thu, Jul 21, 2011 : 1:13 p.m.

My problem with the U is they do not help the city with services they use, mainly the Fire Department. As for pushing them out of here, No. But I would like to see them maintain a better relationship with the city and its residents instead of imposing its will. I would like it, at the very least, to pay taxes when it acts as a landlord As for Pfizer, I have heard, an unsubstantiated rumor, a few times that after they left and the campus was sold to the U, Pfizer tried to buy back the campus and return to Ann Arbor, but was rebuffed by the U.

Cash

Thu, Jul 21, 2011 : 11:14 a.m.

Alan, SPARK has accomplished LOT as the next article attests.......7-11s are looking for more Ann Arbor stores....low pay, lousy hours, no benes and no bullet-resistant glass. Only the desperate need apply.

eagleman

Thu, Jul 21, 2011 : 2:50 p.m.

Oops, it appears your comment was meant to be sarcastic. Apologies, ez.

eagleman

Thu, Jul 21, 2011 : 2:49 p.m.

You're right, ez, it is better to have blight than business. Are you trying to kill Ann Arbor? It sure seems like it.

Cash

Thu, Jul 21, 2011 : 1:25 p.m.

I'm hoping for a few Circle Ks on Main also.

ez12c

Thu, Jul 21, 2011 : 11:44 a.m.

Better off without them...vacant buildings are far more useful.

A2comments

Thu, Jul 21, 2011 : 11:12 a.m.

"They made every effort they could to keep the company going. We have to take an approach very similar to what we did with Pfizer and see if there are opportunities for some of the innovation that was going on inside of Borders to remain in the community." There was no innovation taking place inside of Borders.

ez12c

Thu, Jul 21, 2011 : 11:45 a.m.

I agree. However in the old days, the media says that Border's inventory system was something special. An innovation that wasn't used in other bookstores. Doesn't count anymore though does it?

Alan Goldsmith

Thu, Jul 21, 2011 : 10:26 a.m.

Yeah we want Mike Finney, failed local ex-leader of SPARK to explain this to us. And Donna Doleman, a SPARK PR flack to put a positive spin on this too. "One of SPARK's key services is a free weekly e-mail newsletter with job openings in the Ann Arbor area, which can expose workers to growing companies they did not know about." You're kidding?

Cash

Thu, Jul 21, 2011 : 1:23 p.m.

Alan,I think you just got a great job offer from ez....assuming he's not Snyder it doesn't mean much though. :-(

David Briegel

Thu, Jul 21, 2011 : 12:53 p.m.

Well ez, we didn't pay Alan $250,000 a yr to do that job !

ez12c

Thu, Jul 21, 2011 : 11:48 a.m.

Not everyone has raving success in every goal they try. To some, I suspect Mike Finney has a list of successes and also a list of failures on his resume. So Alan, what have you done to spur growth of small businesses and innovation to grow business in the State of Michigan? Have you tried? If you failed, should you be forever looked down upon?

thorj97

Thu, Jul 21, 2011 : 10:11 a.m.

Are the 3,000 jobs to be added at the old Pfizer site new jobs or jobs shifted from other University locations? If they are mostly offices moved from other locations, jobs have not truly be added to the local economy.