HC 805 Pfizer's decision to close its research and development facility at Sandwich

Supplementary written evidence submitted by

Pfizer Inc. (PZ 03b)

Further to Pfizer’s appearance before the Science & Technology Select Committee on 28 February 2011, we are writing to provide you with the additional information that was requested during the oral evidence session.

Q39 What support has been given to staff at Sandwich?

· Since the announcement on 1 February, Pfizer has taken a number of measures to support our staff at the site. These include:

· The establishment of an Outplacement Centre. This will provide coaching and advice for colleagues in preparing CVs and interviewing skills. It will also host job fairs and act as a conduit for all external roles. There is currently a procurement review process to select a suitable provider for this on-site service and a Colleague Forum representative is involved in provider selection.

· Colleague Forum: Established in 2004, the Sandwich Colleague Forum is a partnership between employees and the Company (the Forum is the works council organisation for the Sandwich site). The Forum is working to assist employees to understand business issues and change, to present the ideas, views and concerns of employees to management to gain mutual understanding of all aspects of Pfizer’s business. The Forum enables employees to communicate with Pfizer senior management.

· A dedicated intranet site on matters concerning the proposal to exit the Sandwich site. On this site employees can find details of HR Policies, the Presentations/Documents and Minutes from the Colleague Forum, Information on the Government Task Force, External Job Opportunities that we have been approached with, News Bulletins, links to sites including ‘Polish your Presentation Skills, topics such as ‘Spin out Opportunities’. There is also a ‘Submit your comments’ question facility on the web site. We have also added external links to the Select Committee meeting on 28 February, so that colleagues can read about and watch the session with Pfizer.

· There is a specific ‘External Job Opportunities’ page on the intranet site which is a centralised source of external job vacancies which we have been notified of since the announcement on 1 February of Pfizer’s proposed exit from the Sandwich site.

· Line managers are holding departmental briefings and meetings with employee teams as appropriate. Each team of employees has a Colleague Forum representative.

· Colleague Forum representatives have organised ‘drop in’ sessions for their constituents.

· A number of sessions of a training programme ‘Cresting the Curve’ are being organised starting later this month for colleagues. The programme helps employees manage the uncertainties and challenges which arise from the announcement on 1 February and provides some techniques and tips to prepare for change.

· Support has also been provided to Colleague Forum representatives by the Company to assist these individuals to carry out their role as representatives and also to help them manage change themselves. Training is being provided by IPA and a TUPE briefing has been provided by external employment lawyers.

· Regular site Senior Leader Forums are being held and the Colleague Forum representatives have a standing slot on the agenda, both to provide an update on Forum activities but also to provide the opportunity to solicit feedback and any necessary support required from the site senior leadership cohort.

· The Company is having regular meetings with Unite union representatives.

· As noted above, a critical role is played by Line Managers in supporting employee direct reports.

Spin Outs Advice

Following the 1 February announcement a ‘Spin Out and Colleague Initiatives’ workstream has been established which is exploring opportunities to retain talent at Sandwich and utilise the facilities and assets that exist. These options are being supported by the Business Development function in Pfizer.

Pfizer is collecting expressions of interest for any such opportunities relevant to Sandwich facilities, talent or assets in a concise Business Opportunity Form. Pfizer is also preparing some training and information events about starting a business in a Spin-Out Information Event (15 and 16 March). This two-day event has been scheduled to provide support and advice to anyone currently developing ideas in this space. The event will feature talks as well as interactive sessions run by professional trainers from the British Venture Capital Association. Programme topics include:

· Writing a business plan to interest Venture Capitalist

· Raising finance

· Understanding investors

· Protecting and managing Intellectual Property

· Incorporating a company

· Running the business

· Developing an exit strategy

Depending on demand a second event covering the same material may be held in late

March or early April. For colleagues looking to set up a more general business a

separate set of training sessions will be provided in coming weeks as part of the

outplacement support programme.

The Spin-Out workstream has put together a list of online resources that will be of interest to colleagues looking to find out more about how to set up and run their own business.

Q57 When exactly Pfizer stopped recruiting and how many job offers were rescinded?

Recruitment at the Sandwich site is handled at different levels of managerial responsibility. As Site Head, Ruth McKernan is directly responsible for senior level appointments at the site, but recruitment to posts more widely is performed by managers at various levels across the organisation. As soon as Dr McKernan became aware of the potential changes, she personally made the decision that she would not continue recruiting senior-level people until she was confident that it was prudent to do so.

As Pfizer’s R&D Review involved only the most senior decision makers in the Company, and information about it was restricted to them, the Site Head was not in a position to communicate the possible closure to recruiting managers without compromising the confidential nature of the Review.

Therefore in some cases recruitment continued up to the day of the announcement. It is worth noting that due to contractual notice periods, recruitment is a lengthy process and offers are generally made many months prior to actual employment starting.

Once senior management at Sandwich were in a position to act, all potential recruits were immediately contacted and informed of the situation. To date, we have rescinded 12 job offers and 62 Industrial Trainee placements. It is of course a matter of regret that this has affected some colleagues who have recently joined the Company, and we will be doing all we can to help them secure future employment.

Q97 Whether Pfizer lobbied for, and derived benefit from, the £87m road improvement scheme?

The East Kent Access Scheme, which was designed to improve road access to the general East Kent area comprises two phases. The first was completed in 2007 and the second phase, which we understand is costing £87m, is still on-going. Given the indirect benefits of the Phase 1 works, Pfizer made a financial contribution (£1.6m as a part of the compulsory purchase of the land in 2003) to the funding of East Kent Access Phase I, and has supported Kent County Council and Dover District Council’s case for East Kent Access Phase II (EKA II). This was done in response to requests from Kent County Council and Dover District Council. EKA II only has a very indirect impact on the Pfizer site.

EKA II comprises the A256 from Richborough to Lord of the Manor and last bit of Thanet Way along the frontage of Manston. Full completion is expected in March 2012.

Q99 Details of the partners with whom Pfizer is negotiating for the disposal of the site.

Pfizer is writing separately to the Committee Clerk with this information.

Further Matters of Clarification

At Question 59 Ms Nash said "The Committee has also been made aware that the company has been trying to make the contracts given to Pfizer employees similar throughout the world, so that they all have the same rights. That has resulted in the UK staff having their severance entitlement reduced from three and a half weeks to two and a half weeks for every year that they have worked for the company. Was that decision made in the knowledge that this large redundancy may happen in the near future?"

We would like to clarify that the severance package has not been reduced as described above. Pfizer’s standard redundancy terms are 3.5 weeks’ salary per year of service for staff aged 45 and under, and 4 weeks’ salary per year of service for those staff aged 46

and above.

The standard redundancy terms are now subject to the 90-day Employee Consultation process which is currently underway. Under the consultation process, the terms may still be subject to change, however they cannot be reduced.

There was a global review of terms and conditions following Pfizer’s integration with Wyeth. However, Pfizer is not making contracts similar throughout the world. Contracts are subject to the correct employment terms in each country.

The timing of Pfizer’s decision making process in relation to Sandwich

In the evidence session with Pfizer on 28 January and that of 2 March with David Willetts MP there was discussion with respect to Pfizer’s recruitment of staff at Sandwich once the proposal had become known by the Site Head, and also with respect to what dialogue there should have been between the company and the UK Government about its proposal to exit the Sandwich site, prior to that decision being announced.

To ensure there is clarity on this matter we would like to re-state the position.

In November 2010, Pfizer was in the planning phase of its R&D acceleration strategy, and there was a recommendation to exit the Sandwich site, but the final decision to exit Sandwich had not been taken. In November 2010 senior level colleagues were examining the assumptions that were being made about the future of Sandwich; the decision was not final at that point. As Pfizer stated to the Committee on 28 February, the decision to exit Sandwich was finalised by the Pfizer Board in January 2011.

Dr Ruth McKernan

Senior Vice President Pharma Therapeutics Research Units UK,

Pfizer Inc.

March 2011