Mann Set the Pace Early in Health Care
A workaholic with seemingly inexhaustible energy, Alfred E. Mann regularly puts in 100-hour weeks overseeing his biomedical empire--including construction of a new company headquarters on a 40-acre site at CSUN.
Mann, 74, first demonstrated his flair for business in high school, when he took a jewelry course, melted down old silver flatware, fashioned it into jewelry and resold it to classmates. After serving in the Army Air Corps in World War II, he moved to Los Angeles and earned bachelor’s and master’s degrees in physics at UCLA.
He launched his career as an aerospace entrepreneur in missile technology in the 1950s. He entered the health-care field in the late 1960s with the goal of improving cardiac pacemakers. That led to his founding Pacesetter Inc. in 1972, which became the world’s leading supplier of heart pacemakers.
Mann led Pacesetter’s sale in 1985 to Siemens for $150 million. From there, he launched other enterprises.
One firm, MiniMed Inc., makes diabetes management systems, including a pump that gives diabetics their correct dosage of insulin without the need for needle injections. From that company, he spun off Advanced Bionics Inc., which makes cochlear implants, sometimes referred to as “bionic ears.”
His personal fortune, which last year was estimated at $700 million, has allowed him to donate hundreds of millions of dollars to various charities, including $100 million for establishment of the Mann Institute of Biomedical Engineering at USC.
Question: Why did you decide to build your new headquarters at Cal State Northridge?
Answer: We were looking for a site that was large enough to build a large facility. We needed something on the order of 30 acres, and we wanted a location that was close to our current facilities so it would be convenient for our employees, and frankly there wasn’t much room around. . . . So when the introduction was made to Cal State Northridge, that met all of our needs. We were especially intrigued by it because it was a very attractive site and there are a lot of pluses. It was an opportunity to work with the university to benefit the students and for us to have the proximity to the university so that there will be a number of collaborations with them.
Q: What kind of synergy do you anticipate growing between your company and the university?
A: We don’t expect them to do a great deal of research for us, although I understand that CSUN is the most advanced of the second-tier colleges. So they do have some research that goes on there, but mainly the students who are graduating in engineering and the computer science, these people would be attractive candidates . . . and we are going to hire a couple of thousand people in the next couple of years, and it would give us an opportunity to attract people, most of whom live nearby--because that is one of the reasons they go to CSUN . . . because it’s convenient to where they live.
Q: What is the benefit of a long-term lease at Cal State Northridge compared with buying a lot elsewhere?
A: The first problem is that there’s nothing near the current campus, where there was 28 acres available . . . that was the minimum we needed. If we had not been able to do this deal at CSUN, we would have had to leave the city and possibly the state. We were looking up in the north end of Valencia, but we had not found anything suitable there either.
Q: Then why not build this in Juarez or Tijuana where the labor is cheaper?
A: Our business principally involves technology folks and all sorts of people in the support infrastructure. The number of people in manufacturing is only 10% of our total work force--maybe 15%. And so moving to a place like that would not have saved much, and frankly we are committed to doing it in this country.
This is very sophisticated stuff and you want to control it very closely. And there wouldn’t have been enough benefit to justify going there. Now there are some things we do down in Mexico. We make some of our disposal devices down at the border in [an enterprise zone] and we do that because that’s an area where there’s a lot of cost pressure, and it takes a lot of labor that we have to do down there. . . .
Q: You mentioned earlier that your most recent building before MiniMed-CSUN was a structure you built for Pacesetter Inc. in Sylmar. What did you learn from that project?
A: We learned that you don’t build in Los Angeles. . . . We had nothing but heartache with that building. The city bureaucracy was impossible to work with. There was interference all the time. They stretched things out in coming out for inspections and were picky about every little detail. . . . But I’ll tell you that the group of folks the mayor has put together to help businesses has completely changed things. Mr. [Andrew] Adelman [general manager of the city Department of Building and Safety] is fantastic. He’s completely changed the focus of the city. They don’t try to interfere with doing building, they try to work with you as a partner, to make sure you do the job. And they’re constructive rather than interfering. It’s a whole different attitude in the city.
Q: Is Southern California’s labor market up to the task as far as meeting your needs?
A: We have such a reputation for treating our people well and with respect that we seem to be able to attract people when others are having difficulty. We’ve been hiring a lot of people. I don’t know what it is now. We’ve slowed down a little bit but earlier we were hiring something like 40 people a week for awhile.
Q: How much of your revenue is in the form of government contracts and research grants?
A: Very little. We do have a couple of small research contracts here. . . . we’ve gotten from the [National Institutes of Health] for example, but that is a relatively small part of our business. About one-half of 1%.
Q: What is the likelihood that CSUN will be able to develop government contracts as a way of capitalizing on the relationship with MiniMed?
A: It’s up to them. We’ll provide some assistance and facilities and internships, and give some lectures. Perhaps a few research contracts may come about at CSUN but really it’s a separate enterprise there.
Q: How would you compare this private-state partnership at CSUN with that at UC Irvine?
A: That’s a different thing. It’s a development by some outside developers who are trying to create an industrial park for a variety of people. Our deal is directly with CSUN to develop a park exclusively for our company. And they have . . . some other land that we would like to expand into for some of our enterprises, but that’s all on hold now. I would have liked to put Advanced Bionics there, but we needed a minimum of 10 acres and with the change of administration [at CSUN], there was no way of getting it done in time. We’ve had to move elsewhere.
Q: Has government hindered or helped your relationship with your customers?
A: They don’t interfere, other than we can’t sell a product unless it’s approved. . . . The biggest problem is education. People don’t realize the awful consequences of [diabetes]. And even when they do, sometimes it’s human nature to say I’m not going to go blind--that other guy over there is going to go blind or lose his kidneys or suffer amputations. One-third of all cardiovascular disease is caused by diabetes. There are always issues they aren’t willing to buy into, because today the complexity of dealing with the disease is so great that not many people are willing to make the commitment--even though they realize that over time they are going to suffer.
Q: Why is such a large area of your new building devoted to research?
A: There are lot of things that we’re doing. There are enormous opportunities in drug delivery in a variety of therapies. We have a program in pulmonary hypertension, a program in AIDS, a program in cancer. We deliver [medication] with pumps. That’s our specialty, micro-infusion pumps.
Q: How many different products does MiniMed manufacture?
A: We make the glucose sensor [which monitors glucose levels in blood to determine insulin dosages] and the monitor unit for it. We are developing a patient version of it and a transmitter and receiver for it. We make a device that downloads the information into a computer or modem. We make our external pump, we make the reservoirs for those pumps here. We make our disposable sets in Europe or in Mexico. We make . . . the implantable pump and all of its parts here and the long-term glucose sensor. We are developing . . . other products. We’re developing a disposable pump for Type II diabetes and other applications. We’re building an automated factory for that in order to be cost-effective in that arena.
