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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.

Bob Evans

January 17, 2010

7 Min Read

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: "IBM's expectations for the Dubuque project have been exceeded," said Diane Diggelmann, senior location executive for IBM in Dubuque, in an e-mail to the TH through IBM's communication division.

Diggelmann said there are no changes in the company's rollout plans, and the IBM partnership with local and state leaders has enhanced the recruitment effort. Rumors of recruiting problems are unfounded, she said, adding that a high percentage of the candidates hired have come from the tri-state area.

Okay—so why doesn't IBM just take all the mystery out of this and tell the good people of Dubuque and Iowa where things stand with hiring? It's not like this is a request for IBM to post all of its business plans and intellectual capital on a public website—rather, this seems like the sort of information that Iowans have a right to see in return for their $52 million, and that IBM should be eager to share as an ongoing display of its good-faith efforts in negotiating aggressively and honestly when seeking out locations for expansion.

This is a subject I've been following for about a year, since I first heard of IBM's Dubuque effort along with parallel plans from Hewlett-Packard to open similar global service centers in small towns: Conway, Arkansas and Rio Rancho, New Mexico. These are terrific developments for each of those communities—well, potentially terrific developments. It all depends on the hiring that happens, the quality of work that's done in the centers, and the business value generated by those centers: are they core to the future business operations of IBM and HP, or are they tactical and short-term P.R. moves?

As I wrote in column called Global CIO: HP And IBM To Add 4,000 U.S. Jobs In Three Small Towns on Sept. 2:

"Within the next 12 months, more than 1,000 people will be hired by two of the world's most-admired companies to support global clients of HP and IBM. Over the next few years, that figure could approach a total of about 4,000 new jobs in the communities of Dubuque, Iowa; Conway, Arkansas; and Rio Rancho, New Mexico. That is fabulous news, and we can all hope that a couple years from now HP and IBM will be so impressed by the work being done in those locations that they decide to open several more around the U.S.

"And if they do, I hope those two great companies will practice more vigorously the transparency they strive to provide for their global clients, and offer detailed breakdowns of the tradeoffs between communities desperate for jobs and private enterprises looking to provide the highest possible services at competitive costs.

"In the meantime, here's a sampling of comments from officials in Dubuque, Conway, and Rio Rancho. And while I care a whole lot more about the individuals who will be competing for these jobs than I do for the bureaucrats working the levers, it's just about impossible not to be touched by the empassioned intensity in these voices so eager to bring jobs and stability and perhaps even prosperity to their communities.

"And that, I think, is why I'm a bit ambivalent about what could be viewed as unconditionally wonderful news: because at stake here is more than just some haggling over price, or the specs of a product, or the elements of a business process. No, what is at play here is the livelihood and the dignity and the desperate hopes of individuals—4,000 of them—who deserve better than to be deployed as front-line players in a game in which neither they nor we know what the real score is. "

C'mon, IBM—you demand that your customers receive extensive transparency in their dealings with you, and that's one of the reasons they value you so highly. And I'd contend that since Iowa and Dubuque gave you $52 million in incentives, that positions them as a customer of sorts as well—and they least they deserve is a public airing of the types of jobs being generated by that $52 million.

You've set extremely high standards for yourself and your dealings with customers and partners, IBM, and you have enlisted the people of Iowa in general and Dubuque in particular as very close partners and, in some cases, employees. So now, with the public having put up not only $52 million in incentives but also considerable trust in you as a strategic partner, it's time for you to disclose the Dubuque hiring figures. Because transparency is more than a concept.

About the Author(s)

Bob Evans

Contributor

Bob Evans is senior VP, communications, for Oracle Corp. He is a former InformationWeek editor.

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