Inside IBM: workers say 350 jobs are leaving Rochester - KTTC Rochester, Austin, Mason City News, Weather and Sports

Inside IBM: workers say 350 jobs are leaving Rochester

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ROCHESTER, Minn. (KTTC) -- Anger is starting to bubble among IBM employees over Big Blue's decision to shift 350 computer manufacturing and refurbishing jobs to Mexico and upstate New York.  Workers say IBM is targeting 200 full-time employees and also 150 temps hired through Manpower.

The shock set in for people working at IBM's sprawling campus in northwest Rochester Tuesday, as IBM executives shared a decision in meetings with workers that hundreds of manufacturing jobs are moving to Guadalajara, Mexico.

IBM is a global computer giant with twelve research laboratories around the world and manufacturing and support plants and offices in dozens of countries.  In recent years, there have been other such "resource actions" with the company shifting jobs to China, India or other parts of its "smarter planet."  The new initiative appears to be directly related to IBM's strategy to stretch its concepts of cloud computing to small and medium-sized businesses in emerging markets around the globe. 

Because the creation, manufacture and support of the eServer iSeries and pSeries lines has its roots deep inside the massive IBM Rochester facility, this shift may actually signal an end to computer manufacturing in Rochester.  Recent IBM descriptions of itself and its Rochester organization allude to 4,400 employees aligned with 30 different IBM organizational units inside the high-security complex.  But it has become impossible to verify the accuracy of this summary since a wave of change inside IBM the past four years.  One IBM insider estimates that current employment at IBM Rochester is now at 2,200.  If that's accurate, the new round of cuts would drop the total to below 2,000.

Scott Cook, an IBM spokesman based in Chicago, confirmed the Rochester cuts to KTTC NewsCenter Tuesday afternoon and said the executive decisions shared with employees are simply about creating the "best possible infrastructure" for the company.

"Any layoff is a bad layoff," said Rep. Kim Norton (DFL-Rochester).  "But making certain that it's under the 200 is better news." 

Norton's comment was made Wednesday, prior to KTTC's reporting that the number is actually 350 employees when including the temporary workers not receiving full-time benefits.  She added, "IBM has been a wonderful part of our community for many years and they are continuing to be a wonderful part of our community just not in that manufacturing area."

"I think all of this causes us even more so to look at our business climate and make sure we don't have any more losses like this to the extent we can," said Sen. Dave Senjem (R-Rochester).

Rochester Area Chamber of Commerce President John Wade reminded others that even global companies like IBM are susceptible to a fluctuating market. "Business is never constant," he said.  "It's either going up or it's going down. Businesses make decisions based on what's best for their customers and probably their shareholders. The most important thing we can do in this community is know that we have a plan to grow this future."

IBM told its Rochester employees that manufacturing of PowerPure Systems and PureFlex systems are both moving to Guadalajara, Mexico.  In addition, the used and refurbished power system manufacturing is going to be shifted to the IBM complex at Poughkeepsie, New York.  These production lines are for mid-range computers for business applications.

The company will not divulge numbers of workers negatively affected at the Rochester manufacturing site, but sources initially estimate that 200 full-time employees might be impacted when the work they do in Rochester moves south of the border.  Now multiple sources have done an informal "head count" and tell us that 150 other "Manpower workers" will also lose their jobs.

In the Tuesday meetings, employees were told that IBM wants to start manufacturing the first product out of Guadalajara in the third quarter of this year, but Cook says the shift of jobs will not be complete until mid-2014.  This is just the latest of downsizings at IBM Rochester, a massive complex that has been a backbone of IBM research and manufacturing over the past 50 years, with 3.1 million square feet on the main campus, more than half the size of the Pentagon.

Community leaders are still unsure how many people actually work at the IBM campus off U.S. 52 in northwest Rochester, or report there but work from home.  A spokesman for the Minnesota Dept. of Employment and Economic Development said the agency does not know how many people currently work there, and is not sure if there is any government agency that does keep a head count. 

"DEED collects numbers by industry but not by specific companies," said Monte Hanson with the Minnesota Dept. of Employment and Economic Development. "So, for instance, while we can tell you how many people work in manufacturing, we don't know specifically which companies they work for."

One thing is certain -- people who work there are looking over their shoulders. 

"A lot of us are worried it will trickle down to our areas.  IBM in Rochester will be a thing of the past... if they keep moving things globally.  Sad," said one IBMer.

Even so, there's at least one brilliant bright spot inside IBM Rochester that's still blazing away.  The Blue Gene/L supercomputer was invented and perfected here, and the human genius driving its development is alive and thriving in Rochester, working with research scientists at Mayo Clinic, the Hormel Institute in Austin and the University of Minnesota.

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