Outsourced IBM Workers Denied Federal Aid - InformationWeek

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Outsourced IBM Workers Denied Federal Aid

Department of Labor turns down bid for Trade Adjustment Assistance.

The U.S. Department of Labor has rejected a request for assistance by a group of former IBM workers who claim their jobs were offshored to China.

The workers had requested aid under the Trade Adjustment Assistance program, but a note published Tuesday in the Federal Register indicated that the request was denied. The decision applied to an appeal the workers made on an earlier denial that Labor Department handed down in February.

The workers had been employed at IBM's Integrated Supply Chain Operations unit in Hopewell Junction, N.Y. They claim that they were laid off because IBM offshored their positions to a company-operated facility in China.

IBM cut a total of 274 jobs at Hopewell Junction in January. The move was part of a larger company-wide staff reduction. Big Blue has handed pink slips to about 9,000 U.S. workers since the beginning of the year, according to labor sources and company documents.

Labor Department officials said the workers at the plant did not qualify for TAA assistance because they weren't producing a saleable product that had been displaced by imports.

A Labor Department investigation found that the workers "managed existing applications in the IBM procurement portfolio that were used internally for purposes such as invoice support, Web orders, and procurement," according to the Federal Register.

Those activities "are not considered production of articles within the meaning" of the Trade Act, the note said. "No production took place at the subject facility, nor did the workers support production of an article at any domestic location during the relevant period," officials ruled.

Under the TAA program, workers who've been displaced as a result of imports are eligible for a range of benefits, including retraining and relocation allowances and income support. But the program has usually been applied only to workers who were producing tangible goods.

However, President Obama in February signed a bill that could result in the program being applied more broadly.

"These workers need to be aware of changes in the TAA program that go into effect in May and resubmit their request for aid," said Lee Conrad, an official at an IBM workers group called [email protected] "They also need to keep the heat on the Department of Labor and if need be contact their congressional representatives. They deserve the assistance that TAA offers."

IBM hasn't commented on its recent layoffs.

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