IBM considers moving high-paying jobs overseas

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(Host) Executives at IBM say they need to step up efforts to move many high-paying jobs overseas. The computer giant is Vermont’s largest private employer – the company is considered vital to the state’s economy. And Governor Jim Douglas says his staff will raise the jobs issue with IBM officials.

VPR’s John Dillon has more:

(Dillon) The news that IBM was considering moving thousands of jobs offshore came from a leaked audiotape of a high-level company conference call. In the industry, the practice is known as off shoring. And one company executive said during the conference call that IBM must keep pace with its competition by moving jobs to countries such as India, where wages are much lower.

The threat to local employment is a rallying point for union organizers. Ralph Montefusco is a former IBM worker who is now an organizer with “Alliance@IBM,” an affiliate of the Communications Workers of America. Montefusco says some of the 7,500 IBM jobs in Vermont could be cut as the company moves its operations overseas.

(Montefusco) “I can’t say exactly how many. But what I can say is they list the types of jobs that are going to be targeted in this round of off-shoring. And they list software development and maintenance, engineering, chip development, IT services and support, accounting and financial services, and call centers. And I can tell you there is a certain amount of chip development and design development that goes on in Vermont.”

(Dillon) Montefusco says one particularly troublesome aspect of the company’s plan is that workers will have to train their foreign replacements, creating trouble for IBM’s human resources department:

(Montefusco) “They specifically state in this presentation that people are going to have to train their replacements, which is going to cause a bit of an HR problem while people are doing that. And also they talk about the difficulty of explaining to people that their job isn’t going away. Their job will continue to exist. It’s just moving to another country and being done by somebody else. So I think there’s going to be a lot of concern and a lot of upset over this.”

(Dillon) IBM has cut about one thousand jobs in Vermont over the last two years. A company spokesman says he didn’t know if the latest move will affect employment at IBM’s plant in Essex.

Governor Jim Douglas says the issue didn’t come up in a recent meeting between state Commerce Secretary Kevin Dorn and IBM executives. Douglas has been a strong advocate of IBM’s priorities in Vermont. He says IBM’s future here depends on worldwide economic trends, as well as local factors.

(Douglas) “IBM has made it very clear that it’s important to the company that the Circumferential Highway be completed, that the permitting process be more expeditious, that electricity rates in Vermont be more competitive, that some of the other disadvantages that they’re facing from a competitive standpoint be addressed. So generally, it’s combination of local and global issues that result in a company’s decision.”

(Dillon) Douglas says his staff will ask IBM about the offshore plan. The union, meanwhile, will hold a presentation next week in Burlington and will play the audiotape of the IBM conference call.

For Vermont Public Radio, I’m John Dillon in Montpelier.

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