Posted on 08/18/2003 7:57:14 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
ESSEX JUNCTION, Vt. -- After weeks of speculation that layoffs were coming, IBM made it official Monday -- another round of cuts for the region's largest private employer.
The computer giant is laying off 500 employees at its Essex Junction plant and another 3,000 workers will be forced to sacrifice a week without pay next month. About 100 more workers will lose their jobs at IBM facilities elsewhere.
At the Essex Junction facility, workers began getting the word shortly after the workday started. They were called in one by one, like Joe Pelletier, to hear the bad news that they were out of work, victims of a downturn in IBM's microchip business.
"I put all my hopes in this place, and it's gone. I don't have that much time invested, but still," Pelletier said.
Pelletier had worked at IBM less than five years, but colleagues with more seniority were also let go.
"They gave me this information right here -- tell you they're laying you off -- (after) 26½ years. (I had) all good appraisals, but that's the way life is sometimes," said one long-time employee who didn't want to be identified.
IBM's technology group lost $100 million last quarter. Spokesman Jeff Couture called Monday's action a "permanent layoff" and said he can't say for sure there won't be more.
"I can't predict the future. We're doing what we need to do today to address the business conditions today," Couture said.
Couture said the Vermont plant remains an important facility for IBM, but the 500 workers laid off Monday know they won't be part of its future.
"Now I will go and find something else to do," said laid-off worker Brad Manchester. "I have a business I may start and go that route. But my job here is done."
Monday's layoff cut across almost all departments. Engineers, technicians, chip designers and administrative staff were among those put out of work. The laid-off employees will be paid for another 60 days and then receive a severance package based on how long they worked for the company. IBM said the additional 100 layoffs were at plants in North Carolina, Texas, Minnesota and New York, although none were at the facility in Fishkill.
Including Monday's 500 layoffs, about 2,000 workers at IBM-Essex Junction have lost their jobs over the past two years. The last round of cuts was June 2002 when almost 1,000 were laid off. About 500 employees lost their jobs just after Thanksgiving in 2001. IBM also cut a few hundred temporary staff and in July, reduced hours for more than 2,000 production workers, none of whom were included in Monday's layoffs.
Layoffs Shake Local Confidence In Big Blue
The cuts at IBM have shaken the faith many in the community had in the company, many of whom had expected to have jobs for life at Big Blue. That was the case with twin brothers Randy and Ron St. Amond, who began their careers at IBM on the same day 26 years ago -- and ended them together on Monday.
"When we started here in 1977, we were promised full employment. We were told that IBM wasn't a top-payer, but that we'd give up pay for job security and that we had a job for life," said Randy St. Amond.
Some, like the St. Amond brothers, feel the company broke promises to its employees. And even civic leaders, such as Essex Village Manager Charles Safford, expressed a feeling of disappointment in the giant corporation.
"We can respect the tough business decisions they have, but obviously, that's hard on the IBM family and hard on the community," Safford said.
IBM had become as much a staple of the community as the train that runs through it. But now, some people are wondering if the giant employer can be relied upon anymore.
"We've lived here 40 years. We remember when they started and grew. Now they're shrinking and going. I bet they won't be here in five years," said Essex resident Ed Fausel.
Ron St. Amond believes he and his brother, Randy, are proof that times are indeed changing.
"The bottom line is that large companies today are more concerned with profit than they are with people," Amond said.
Governor Reacts To Layoffs
Monday's round of layoffs at IBM is the first since Vermont Gov. Jim Douglas took office. He said that the economic climate, which IBM blamed for the cutbacks, is improving, but it will be a slow process.
"We didn't get into this situation overnight and we're not going to get out of it overnight. I think we're beginning to move to address some of the competitive disadvantages that IBM and other companies face," Douglas said.
While the job cuts adversely affect hundreds of families in the Champlain Valley, thousands of investors responded positively to the move. IBM stock closed $1.73 higher Monday.
Some Local Businesses Still Optimistic
Higher stock prices are little relief for the region that relies on IBM to boost its economy. The saying goes, "When IBM sneezes, Vermont gets a cold." But not everyone is reaching for the tissues.
At Rocky's Pizza, a good meal doesn't cost too much, so owner Rocky Leary thinks he'll be all right. But he wonders how some other, more expensive restaurants will do.
"I'm lucky because I'm at the $10 pizza end," Leary said.
Joe Chastenay, of the Essex Country Club, also expects little impact from the IBM cuts -- again because a round of golf isn't too expensive there.
"You go out to dinner, it's going to be $25, so (a round of golf) fits into the budget. It's how many times you're going to play," Chastenay said.
Even for big-ticket purchases, such as a house, experts are optimistic. The local real-estate market is tight and the IBM cuts are not expected to change that, according to Tom Heney, of Lang Associates.
"For folks that do choose to leave, honestly, the market will absorb the inventory they provide," Heney said.
Economic analyst Jeffrey Carr worries about the long-term effects of losing skilled workers -- such as the ones laid off at IBM -- but he said Vermont will continue to see some job growth.
"A couple steps forward, one back, one sideways and the other one forwards. (It's) more like a dance step than an economic recovery," Carr said.
Carr said studies from past IBM layoffs show that for every job IBM cuts, there is a negative impact on almost three other Vermont workers. So despite his optimism, Carr said it's too early to guess just how big the impact of IBM's cuts will be on the state.
1977 has been "over" for 25 years. You are worth what you are worth to the company on any given day. The moment you are more of a liability rather than an asset to a company, either because of outdated skills, laziness, age (i.e. "slowing down"), family (no wasting time coaching Little League; gotta work 60 hours a week to increase company "productivity"!), or competition from $5 per hour overseas labor, or $20 per hour H1B Visa labor, you're job "guarantee" is voided. That's life. That's reality.
What's more, your government (Congress-wh*res and six-figure Bureaucrats alike) is doing all it can to give away your "American" job to those who are more deserving, i.e. any younger, third world (or evolving second-world) college graduate who is not an American citizen.
I wonder how many foreign H1B/L/NAFTA contractors (or visa "employees" from overseas affiliates) IBM employes in that region, or in the USA? Bet it's more than 500. Bet that they hire 200 more over the next 12 months, while these 500 former employees are forever "history".
SFS
I hate to see folks get laid off, and knew a few good folks there that did get let go, but most of the jobs moved to the customer who was in-sourcing and no longer needed IBM's expensive facilities.
At its peak in 2000, the plant provided more than 8,500 jobs, nearly 3 per cent of the state — one of America’s smaller ones — workforce.
That number is now down to 6,200, the lowest since 1994. The layoffs came days after reports that IBM was set to ramp up its workforce in India from its current 4,500 to 10,000 in the next two years.
There is an increasing pattern of US companies like Intel, Dell, AOL and others downsizing in the US while expanding operations in India and other countries even if the jobs are not similar. Those 500 jobs will not go to India, IBM spokesman Jeff Couture explained.
The layoffs, mostly on the manufacturing side ....
But, take heart! We Americans may not manufacture much anymore (having sold that particular birthright to the highest foreign bidder), but we sure do talk, write, schedule, transfer money, bureaucratize, push paper, and arrange things well. We leave the mundane tasks of designing and making things to the 'less sophisticated' countries now. We are above such nonsense.
I’m so happy for India (and China, Singapore, the Philippines, Ireland, Russia, South Africa ....). Outsourcing not only affects our future economy (in sinister ways that many of us haven’t even considered), but …. far more ominous …. It places us at their mercy.
For some reason the phrase giving your enemy enough rope to hang you keeps running through my head lately. I may write a song with that title someday soon (It goes without saying that it’ll be in a minor key).
Arte you enjoying this Willie -- taking FReepers for a ride, that is?
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