In a sharp reversal to extensive cutbacks in their U.S. workforces, Hewlett-Packard and IBM are opening service and support centers in three small towns across the U.S. that are expected to employ about 4,000 people in total.
State and local officials are ecstatic, the three communities are excited about the extended economic impacts of the sprawling new facilities and their skilled IT workforces, and both HP and IBM deserve the positive buzz surrounding these new facilities.
Like most people, I'd really like to see these new tech hubs work out beautifully for all involved, becoming economic-development magnets for the three communities, providing good wages for the few thousand workers who'll be hired, and sparking confidence within HP and IBM that each company could benefit greatly from opening more of these centers around the U.S.
But. But. Is it really a good deal for everyone involved? And if it is, then how good: okay, solid, great, wonderful, or stupendous? After the ceremonial shovels have been put away and the ribbons have been cut and the paper-pushers go back to wherever they came from, will the local taxpayers see a real return on their investments? Will the employees find themselves doing challenging and valuable work? Will HP and IBM regard these facilities as potential incubators for bigger and better things to come, or will they turn out being largely symbolic sops to some P.R. strategy?
As I mentioned in a blog post last week about IBM's new center in Dubuque, Iowa, the new facilities appear to be great deals for everyone involved, at least judging by public comments. And IBM and HP have every conceivable right—indeed, to stockholders, the obligation—to negotiate aggressively with state, county, and local officials to win the most favorable terms they can get. In this seller's market, they'd be crazy not to: can you imagine any state or community around this country that wouldn't make every effort possible to land big, clean, snazzy new facilities housing high-tech workers and bearing the logos of two of the biggest and most-powerful and best-regarded companies in the world?
But let's step back a moment and take a less-frothy look at a few numbers:
IBM's Dubuque IT services center: It's expected to ultimately have almost 1,300 employees, with 600 to be hired by the end of this year and about the same number in 2010. A local report from IBM's announcement 17 months ago said IBM plans to invest $100 million in the facility, but offered no details on that investment. In return, IBM is expected to receive incentives from state and local governments in the range of $50 million. So, 1,200 jobs for $50 million—a good deal for all? We should all hope so. But if it's too much for Iowa and Dubuque taxpayers to expect their elected officials to come clean about the details, shouldn't they expect that a great company like IBM would be willing to be quite transparent about what it's giving and what it's getting?
