Hudson Valley: IBM

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Claim to Shame
IBM Corp. has received hundreds of millions of public dollars, and most of this money comes with the simple request that jobs be retained or created. Instead, IBM has continued to slash employment in New York. IBM is currently hundreds of jobs below their target, yet the local IDA and ESD continue to grant the company new forms of financial assistance—with even fewer strings attached.
Loot
Tax exemptions and tax-exempt bonding from the Dutchess County IDA, ESD grants and subsidies
Length
1999-2029 East Fishkill; 1993-2028 Route 9
Jobs
Cut 3,515 jobs Route 9; ? East Fishkill
Total Tax Break$93,000,000+

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IBM’s two facilities in Dutchess County have received gigantic, long-term public assistance. Their facility in East Fishkill received bonds and grants covering a 30 year period, and the tax breaks on their Route 9 project were recently extended until 2028, making this a 35-year corporate subsidy.

In a recently-annouced deal, the Dutchess County IDA is not requiring any commitment from IBM to retain or create jobs, possibly because the corporation has failed to meet its job retention and creation goals for the last 20 years. It fell far short of its goals at Route 9, cutting 3,515 jobs, and fell far short of its promise to create 700 jobs in East Fishkill.

Unfortunately, due to poor reporting and lack of transparency, it’s difficult to tell just how poorly this corporate subsidy project has performed to-date. IBM is notoriously secretive about its job cuts—it currently reports 0 employees at its East Fishkill location instead of the actual number. It’s also difficult to calculate the total value of the tax breaks that IBM has cashed in on over the years. In the meantime, the development agencies seem resigned to giving the 9th most profitable corporation something for nothing, as local residents watch their full-time jobs outsourced or replaced by temp and contract jobs and their own property taxes rise.

Bio

IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. In 2012, Fortune ranked IBM the #9 most profitable business, with $15.85 billion in profits. A major employer in the Hudson Valley, IBM directly accounts for approximately 17% of the total wages in Dutchess county, and vendors, contractors and temps whose jobs stem from IBM add many more jobs. IBM payroll jobs have been in decline for several years, locally and in the U.S. even as the corporation’s overseas workforce has grown enormously in places such as India and China, and their reliance on temps and contract workers at home continues to grow.

Mid Hudson News: Union Workers present IBM with raspberry “Hall of Shame” medal

August 16, 2012. Union workers held a rally outside the Dutchess County Office Building Wednesday afternoon, criticizing IBM for taking public tax incentives while they say Big Blue created no new jobs. The event culminated with a mock “Hall of Shame” award presented to the corporation, formerly one of the largest local employers. Continue reading →

Induction Ceremony Photos



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