IBM’s Vermont plant takes a hit again

by Robert Maynard

Once again IBM’s 200 millimeter plant in Essex Jct. is being targeted for job cuts.  When IBM built its 300 millimeter “Fab 2000” plant in Fishkill NY, instead of upgrading the existing plant here in Vermont, many thought the writing was on the wall for a slow pullout of IBM from Vermont.  The Vermont plant was at the cutting edge of semiconductor technology and development and many of the company’s top R&D/technical personnel worked there.  From a purely technical perspective, it would have made sense to expand the existing plant here in Vermont.  Back in 1998 I was on a cost cutting team at IBM that was charged with the responsibility to come up with ways to cut costs.  After we completed out work, an executive from IBM headquarters in Armonk NY came to visit us.  I took the opportunity to ask if Fab 2000 was going to ne built here in Vermont.  Hs answer was “not a chance, the taxes are too high.”  I later was informed that it was the whole package of taxes and regulations that out weighed the Vermont plant’s technical advantages.  We are now 15 years removed from that conversation with the IBM executive and Vermont’s tax and regulatory burden has gotten worse, with our energy policy causing serious problems for IBM energy cost and the looming implementation of Green Mountain Care causing all sorts of questions about future tax increases on top of an already excessive tax burden. Does IBM plan to slowly phase out the Vermont plant as some have speculated?  We do not know the answer to that question, but we do know that there has been a steady decline in personnel since Fab 2000 was built in Fishkill.  Here is an update from the Vermont Digger on the latest round of layoffs at the Essex plant.

IBM has announced another round of layoffs at the company’s facility in Essex Junction as part of a global reorganization.

The exact number of Vermont workers to be laid off is not clear. IBM, presumed to be the largest private employer in the state with more than 4,000 employees, stopped releasing data on employee numbers in 2010.

The rough estimate of more than 4,000 employees should be compared to the roughly 8,500 employees that once worked there.  Phasing out the Vermont plant may not be an officially announced policy, but the numbers hint that this might be what is going on.