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Historic GM Plant Finds New Life As A Pharmacy

Filed by KOSU News in Business.
November 24, 2011

The former Fisher Body 1 plant in Flint, Mich., produced a lot of cars, thousands of jobs and lots of history — it was one of the places where sit-down strikes led to recognition of the United Auto Workers in 1937.

But General Motors abandoned what remained of the site after its bankruptcy, and the new occupants don’t make cars there. Instead, they’re riding the next economic wave, selling prescription drugs to an aging population.

Dan Wright is one of those kinds of experts who can always tell you the history and significance of an old factory — the guys at the bar across the street. Wright worked at Fisher Body briefly in the 1970s when he was a line spot welder at Fisher Body 1. He’s still a regular at the Caboose Lounge nearby.

“The bars were always full, and restaurants were always full, and stores were always full,” Wright says. “And all these stores, bars and restaurants you go to now … there’s nobody there. It’s sad that Flint died the way it did.”

Michigan’s governor has declared a financial emergency in Flint, the once prosperous birthplace of GM. And it was at Fisher Body in late 1936 that something unusual happened — or rather, nothing happened. The workers had sat down; they would not work. The strike eventually earned the UAW recognition from GM.

This year, Diplomat Specialty Pharmacy moved into a building on the Fisher Body site that used to be a GM research facility. Diplomat specializes in drugs that target serious illnesses like cancer, multiple sclerosis and HIV/AIDS. Many produce side effects, so nurses here call patients to make sure they stay on their treatment plans.

The Transformation Of The Midwest

In the distribution center, bins of medications wind along a conveyor belt, ready to be shipped.

“Specialty pharmacy is the fastest growing component in the pharmacy industry. Traditional pharmacy is growing at 2 to 5 percent a year; specialty pharmacy is growing at 15 to 25 percent a year,” says Phil Hagerman, the company’s president and chief executive officer.

Diplomat hired more than 200 people this year, and Hagerman says the company is on track to top $1 billion in sales next year.

“We’re distributing as many as 2,000 or more prescriptions a day around the country, shipping to every state, every day from this building,” he says.

The building highlights the transformation of the industrial Midwest. GM shuttered the sprawling body plant in the 1980s, and much of it was demolished. But the steel and concrete — the main structure of the building — were retrofitted into an engineering and design center for GM.

Diplomat later bought half the space — still enormous at 550,000 square feet. That’s more than 1,000 square feet for each of the 450 employees there.

“How often do normal business rules allow a company to have a 10-year growth footprint? It just doesn’t happen, because the cost of the building is so great,” Hagerman says. “But because we acquired this from an auction process at a very, very low cost, we have a building we know we can grow into for about 10 years.”

So that’s one advantage of acquiring property discarded by industrial giants. Advantage No. 2: 1,700 cubicles left behind. Advantage No. 3: Random industrial signs that read, “Caution: Pedestrian traffic. Sound horn.” Advantage No. 4: The government loves you, especially if you’re a high-tech or medical company.

In fact, Diplomat won’t pay property taxes here for almost 15 years, and it got a $62 million tax break from the state. In return, Hagerman says he’ll hire 4,000 people in the next two decades.

This story was produced by Changing Gears, a collaboration of WBEZ Chicago, Michigan Radio and ideastream Cleveland. [Copyright 2011 Michigan Radio]

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