Iowa Spent $50 Million to Lure IBM. Then the Firings Started
by Alex Barinka
12:00 AM EDT
May 19, 2015
Five years after bringing high-tech jobs to the Midwestern states of Iowa and Missouri, International Business Machines Corp. has fired half its workers there -- sowing ire and disappointment for locals and officials alike.
In April, Iowa Senator Chuck Grassley wrote IBM to condemn the firing of about 700 employees in Dubuque, Iowa. The same month, Missouri suspended tax credits after IBM’s headcount in the city of Columbia fell below the required minimum of 500.
When IBM came to Dubuque in 2009 and then to Columbia, it needed workers to help companies run their technology. Three years later a new CEO decided to automate some of the business, and the firings began. It’s a blow to Dubuque and Columbia, cities that spent a combined $84 million on tax breaks and other incentives to lure Big Blue in the hopes of attracting other technology firms and incubating a startup scene.
It’s a story that has played out often across America: Big company comes to town, provides boost to the local economy and then leaves. In the 20th Century this narrative took decades to unfold, as companies making things like steel and furniture gradually found themselves unable to compete. Now, the process can happen in a matter of years, especially if the employer is a tech company battling disruptive upstarts or rebooting strategy on the fly.
IBM declined to comment on the employment levels in Dubuque and Columbia, future plans for the locations or on the treatment of its workers there. “IBM is constantly investing in skills to meet the demands of our clients, especially in areas such as Cloud, Analytics, Mobile, Social and Security,” Adam Pratt, a spokesman for IBM, wrote in an e-mailed statement.
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http://www.bloomberg.com/news/articles/2015-05-19/iowa-spent-50-million-to-lure-ibm-then-the-firings-started
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