Risk
1/17/2010
02:58 PM
Bob Evans
Bob Evans
Commentary
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Global CIO: IBM Iowa's Birthday: IBM Gets $52M, But What Does Iowa Get?

IBM promised 1,300 jobs for incentives of $52M but isn't releasing hiring figures. That's not right.

Employment is always a serious subject worthy of serious consideration, particularly in these times when more than one out of 10 Americans is out of work. So it is puzzling at best and troubling at worst to see that IBM, after demanding and receiving $52 million in tax breaks and other incentives from Iowa in return for creating 1,300 jobs at a new global service center in Dubuque, will not release specific hiring figures.

What the company will say is that hiring is underway and that various projections are being met. But the concern arises from what IBM will not say, as indicated in a huge story today on the Dubuque Telegraph Herald's website. Under the headline "IBM In Dubuque, 1 Year Later", the article says:

"IBM, along with local and state leaders, all have stated employment at the Dubuque IBM center is on track with the numbers promised in the development agreement, but firm employment numbers have not been released since the location's opening," the article says.

"According to figures relayed to the TH last year, IBM planned to have the first wave of 350 to 400 employees working by the end of June 2009. The second wave of 350 to 400 workers was supposed to begin at the end of August and the full work force was set to be in place by 2010.

"In exchange for those jobs, state and local leaders agreed to a development package with $52 million in incentives for the company."

However, while the Greater Dubuque Development Corp.'s president gushed in the article about the volume of applications IBM had received—more than 8,000—he admitted he does not have specific figures on how many positions have been filled at the new global service center.

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Even more odd is that the state's Economic Development Department, which played a big hand in structuring and doling out the $52 million incentive package, has also not received specific job figures from IBM, according to the article:

Iowa Economic Development Department spokeswoman Kay Snyder said IBM's annual reporting date is June 30. At the reporting date last year, she said the contract was still in negotiation and was not signed.

"We definitely are in communication with IBM and we do understand ... they are on schedule, if not ahead of schedule, and we're pleased with that," she said. Snyder said the department has project managers who keep in touch with companies throughout the year to monitor staffing levels.

So let's see what we've got here: the head of the Greater Dubuque Development Corp., who lavishes praise on IBM and its efforts as if he gets paid per compliment, doesn't have any details on hiring levels, and he's got a whole lotta skin in this game.

The state agency overseeing economic development says it doesn't have any concrete details from IBM but is nevertheless "pleased" with "communication" indicating that IBM is on or even ahead of schedule. That's quite a trick—must be something they teach only in economic-development classes.

And what does IBM itself have to say about its staffing-up progress in Dubuque? From the TH article:

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