The Chips Are Down
By Heintz, Paul | |
Proquest LLC |
Does
"What we're looking at is a city,"
The 59-year-old economic development guru steers his black Nissan Maxima toward a guard shack that stands sentry at the northeastern entrance to
"We're not going to be able to get in," he says, pulling a U-tum and retreating from the fortress. "Security is watching us."
In more certain times, the
"We're dealing with two public corporations that aren't going to tell us anything, because they can't," he says.
Clouds of uncertainty have lingered over
As
Though GlobalFoundries specializes in the very chip-manufacturing work conducted at the
Emails obtained through public-records requests show an administration eager to craft incentives... but hesitant to give away the store to an aging enterprise.
The truth is, nobody outside the corporate boardroom seems to know what will happen to the
Some believe a sale to GlobalFoundries might spell economic salvation, while others expect the firm to shutter the plant and export its jobs to
"I don't think it takes a Phi Beta Kappa in economics to realize there will be an immediate impact," says
Though IBM Vermont is no longer the juggernaut it once was, its footprint in the state remains sizable. According to a recent GBIC report, some 10,000
"I mean, if those jobs went out the door, there's no way around it: It would be, at least in the shortand mediumterm, a major economic problem for the
Since reports of a sale emerged earlier this year, Spaulding's colleagues in state government and
Emails obtained through publicrecords requests show an administration eager to craft incentives that might persuade
"We need to take a rifle approach, not a shotgun approach," Spaulding says. "We need to make sure that with our limited resources, what we use them on is going to provide a real result - not just sort of spray stuff out there and hope it sticks."
Meanwhile, workers say the lingering uncertainty has exacerbated an already stressful climate.
"There are rumors every week that any day now our jobs are going to be cut," says one tech-support employee, who has spent a decade at the plant. "It has a huge effect on morale and whether people get their work done that day. There's an overall sort of apathy."
Along with two other workers who requested anonymity to protect their jobs, that employee says the formerly state-ofthe-art facility has suffered as
"Some of the tools and machines and robots I work with have been there longer than I've been there," says one manufacturing operator who has spent a decade and a half at the plant.
One night, that employee says, he had to wait until midnight to fix a broken piece of machinery. Though the part he needed was sitting right there, he was not allowed to spend another dollar that day.
"The engineers joke that we're making tomorrow's technology with yesterday's tooling, today," he says.
"They just fell in love with the state," says Arthur's daughter,
Soon after their father, Thomas Sr., handed over
For decades after the
But the facility's star began to fall in 1997, when then-
These days, according to
"We have entire floors and buildings that used to be offices that are empty now," the manufacturing operator says.
Depending on whom you ask, IBM Vermont fills a critical - and still profitable - niche in the semiconductor industry or it has become hopelessly obsolete. Either way, it is no longer central to the company's evolving business model.
"
In recent years,
According to
Founded in 2009 when the Emirate of
Accordingto spokesman
"Being able to physically locate commercial manufacturing in close proximity to that R&D work was important to us," he says. "It really wouldn't have been feasible to do this in
Like Keller, Bullard declines to comment on whether GlobalFoundries and
McGregor, the industry analyst, thinks not.
"I'll be honest with you: I don't see major value in any of
In
Local boosters have one more card up their sleeves: a
As semiconductor manufacturers moved their operations offshore in the late 1990s and early 2000s, national security officials worried their weapons and computing systems could be compromised. So they partnered with domestic manufacturers to create secure product pipelines.
In 2004, Sen.
"[Leahy] has protected funding requested by
If
It's also unclear whether a foreignowned company, such as GlobalFoundries, would even be eligible to operate a Trusted Foundry facility, though Bullard says "theoretically it's possible" the company could become certified for
"[Leahy] and many others are keenly interested in knowing how that question would be answered," Carle says.
A Hand Up or a Handout? ;
Months before the financial press picked up on
In a
"From this discussion, It became immediately apparent that there are significant, though achievable, challenges
Thegroup suggested forging a "preferential" electricity rate agreement between
Around the same time, according to emails obtained through public-records requests,
One proposal would have reduced property-transfer taxes faced by a successor company, so long as it pledged to retain at least 75 percent of the existing workforce. Another would have authorized the governor to award up to
As Miller prepared to meet with
Meanwhile, Cioffi was keeping up the pressure on administration officials. In a
As word spread in late January about a new round of layoffs throughout
By late March, another 135 Vermonters had been laid off from the plant. Among them was
In their internal correspondence, state government officials sounded equally pessimistic. After Miller circulated a news story about
As winter turned into spring; Cioffi's emails to the administration grew increasingly frantic. After the
Days later, Cioffi sought the support of
"I don't think any sitting
Coates reassured Cioffi that he had already raised such concerns with Spaulding in person and then did so again in an email to the administration secretary.
"I can't imagine a sale would only see a gradual reduction of employment at the plant," Coates wrote Spaulding. "
The message, apparently, was received.
Just one week later, Shumlin convened a press conference to propose a
'A Number Bigger Than Zero'
Shumlin's political opponents are quick to pounce on the governor for what they call a failure to keep
If the company leaves the state, Sunderland says, "I think it will certainly shine a light on the neglect of the Shumlin administration and the Democratic supermajority on the nuts and bolts infrastructure improvements that obviously should have taken place."
But Shumlin's advisers take exception to the charge.
"This thing about the Circ is not going to stick," Spaulding says, noting that in
According to Secretary of Commerce
On the contrary, administration officials argue, they took steps this winter and spring to cut
"We talk with [
In pre-filed testimony to the PSB,
"IBM Vermont competes on a national and an international level and therefore faces stiff competition from facilities that pay significantly less for electricity than we do in
Of the GMP agreement, Spaulding says, "That's a big deal, man. That's a big deal. That's not sitting around on your hands."
In addition to funding Trusted Foundry, Leahy's staff points to their boss' work reforming intellectual property law from his perch as chairman of the
That sort of access and support from
"They have access to all levels of government, from the governor on down. That's not something
Not everyone is pleased that the state keeps bending over backwards to please one of the world's wealthiest corporations. When Shumlin's
"It is absurd to think that a
"This situation and the uncertainty that surrounds it is worthy of a much higher level of discussion than I've seen," he says.
Carr concedes that
"It's important for us to have something on the fiscal assistance side that's a number bigger than zero," he says.
Administration officials share that view, but they want to make clear to
"The notion of incentives is that, by definition, you're causing things to be different than they'd otherwise be,"
For that reason, several government officials have privately complained that Cioffi's aggressive and public advocacy for more and more incentives has undercut their bargaining power.
Two weeks ago, for instance, Cioffi held a press conference at GBIC's
"Some of [GBIC's] approaches, such as' putting the
Human Toll
What will happen if
"It could be any one of 40 scenarios," Moulton says. "The guesswork can be a little mind-numbing."
If a successor company like GlobalFoundries were to rehire some or most of
"GBIC believes that if VT does not bring its A-game' then any successor will close the VT operations in 3 years and move whatever to a site that appreciates and values job creation, investment and economic development," Cioffi wrote in a rather pointed
Whether layoffs come immediately or down the road, Commissioner of Labor Annie Noonan says her department "will be ready."
"We will have the resources. We will have the staff. We will have the program monies to help," she says.
After
"It's been a real mix of how people have landed, but they were clearly seen as a very desirable group to connect with,"
For Krauss, who lost his job in
After 12 years working as an
"It was exciting and it was challenging," he says. "The pay was good. I was able to save money for my kid's college, move across town to a nicer house, have all the things people want."
Krauss knew going into it that working for
"You get into hide and survival mode," he says. "But you can't win with that mentality."
In January, Krauss realized that another round of layoffs was looming and he might not survive.
"I started connecting the dots and knew my number was up," he says.
In the weeks after he lost his job, Krauss says, he found himself withdrawing from the world. His wife and stepson picked up the slack, and the three took on a roommate to help pay the mortgage. The experience, he says, was trying and humbling.
"It's kind of like starting over," he says. "It rocked me. And I think that's not uncommon."
"Look at
But Carr, the
A precipitous closure would ripple out through the community and affect industries ranging from real estate to forest products, he says.
A total closure, however, "would be really bad, not only for <location value="LU/us.vt.ession" idsrc="xmltag.org">Essex Junction, but for the whole county," says
It would also sap government coffers and strain public utilities.
"It's always a cloud hanging over our heads," Scheidel, the
But he argues that
"We have
Krauss, for one, briefly flirted with leaving the state. He interviewed for jobs all over the country, but in the end he decided to stay. Just last week, he began a new, temporary gig with a growing
"I wonder if I'll ever really stop looking for jobs," he muses. "There's no such thing as job security."
At least some of Krauss' former colleagues feel similarly.
"I've been a union activist for 14 years and I've never seen morale as low as it is. People are saying, Why should I do a good job? It doesn't matter,"' says
"Everybody's reading the writing on the wall. Some are making the decision to leave," says the tech-support worker who has spent a decade at the plant. "In a few instances, management made the decision to cut people and didn't have an understanding of who, exactly, they were cutting."
Another employee, who has spent more than three decades at the plant, says many of his colleagues are excited about the prospect of GlobalFoundries taking the plant off
"A company like GlobalFoundries has a lot more cash behind them to invest in semiconductors, and that's what their business is," he says.
To the tech-support worker, all that matters is that he remains employed.
"If GlobalFoundries was going to come in and keep everyone or a great percentage of them, everybody would be fine with it," he says. "I don't think anyone cares what name is on the paycheck, as long as they keep getting one." ®
BIG BLUE
4.000-PLUS VERMONTERS:
* Source:
It was exciting and it was challenging. The pay was good. I was able to save money for my kid's college, move across town to a nicer house, have all the things people want.
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