Reports: IBM looking to sell chipmaking operations - WCAX.COM Local Vermont News, Weather and Sports-

Reports: IBM looking to sell chipmaking operations

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News of IBM's potential layoffs and sale of its semiconductor business traveled fast in a state that hosts an IBM manufacturing plant.

Reporter Judy Simpson: What would it mean to Chittenden County if that plant were shuttered?

Art Woolf: Well, it would not be good news. It would not be a disaster, but it wouldn't be good news.

Woolf is an associate professor of economics at the University of Vermont and the publisher of the Vermont Economy Newsletter.

"They are not the IBM they were 20 or 30 years ago when they essentially made computers and chips. Now, they are primarily software and consulting, and this is just a small part of their business and not very profitable. So, if you want to boost the profits of a company, one way you can do it is by getting rid of the parts of the company that are not very profitable," Woolf said.

And that could include the Essex Junction plant.

"Unfortunately, this plant is not at the forefront of technology anymore-- there are others, the one in Poughkeepsie. And some of the companies rumored to be looking at IBM have pretty sophisticated plants around the country, including outside of Saratoga, New York. So, it's not clear whether that company would shutter the plant, downsize it or keep it going as it is, or increase it," Woolf said.

Uncertainty surrounding IBM's future is something the village of Essex Junction is all too familiar with; 419 workers were laid off last June.

Judy Simpson: How about the news that IBM would be selling off its semiconductor arm?

George Tyler/Essex Junction Village President: Again, we have heard some of the rumors and I guess my first reaction would be it would be very unfortunate. We would anticipate that probably would mean more job losses which is the opposite of what we want to see here.

The greater Essex Junction community has worked hard to keep IBM happy. Tyler said 10 years ago the machinery and equipment tax was phased out, putting more of a burden on property tax payers and other businesses. And just recently  the town and the village collaborated to support putting the new $7 million police facility on the IBM plant site on land purchased from IBM. At one time, IBM made up 50 percent of the Junction's grand list; today it is more like 10 percent, about $1 million.

"I can only say once again we would love to sit down with IBM. We would love to have the conversation, what else can we do that we haven't been doing that we can do to try to keep them here? I am sure the governor of Vermont would like to have that conversation, as well," Tyler said.

In fact, he would.

"Well, you know IBM is incredibly important to Vermont and I have a good relationship with IBM. I want to do everything I can to keep IBM strong in this great state. I don't know anything or heard anything I have not read in the press, so I have not spoken to them about anything I read in the press, and if I had I would share it with you, but I have not," said Gov. Peter Shumlin, D-Vermont.

But Woolf says look at the big picture.

"You have got to remember that the people who are working at IBM are very talented, creative and have a lot of skills," Woolf said. "So, to the extent that they are here, other companies can absorb them; could be new companies, could be companies that are here that can expand because now they have access to a lot of skilled workers they didn't have access to before. It's not a disaster."

Woolf said anything that Vermont can do as a state to make our businesses more competitive and make sure they don't face higher costs will benefit all of us by having a healthier economy.

I put a call in to IBM corporate media relations. It had not been returned when this story was published.

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