IBM deal portends more challenges

When it comes to the short-term fate of IBM facilities in Dutchess County, residents surely have to be expressing some relief in light of the recent blockbuster deal between Big Blue and GlobalFoundries.

In a move that would have been unbelievable in the days of yesteryear, IBM has agreed to pay GlobalFoundries $1.5 billion to acquire its chip fabrication plants in East Fishkill and Burlington, Vermont. The deal includes the transfer of all of the approximately 5,000 employees at the two plants to GlobalFoundries, and the existing plants will remain open for the near future.

For now, the deal accomplishes several critically important goals — including preserving jobs and providing stability for the mid-Hudson Valley. Essentially, IBM wanted out of the chip-fab business because of high operating and capital expenses, yet Big Blue still needs semiconductor chips for its other products and services. The agreement means GlobalFoundries can supply those chips once the deal is finalized.

That's all well and good. But the long-term picture is far more ominous. GlobalFoundries owns a plant in Saratoga County that is continuing to expand, while IBM's presence in Dutchess County continues to diminish. Those are the hard and cold facts. What's more, both IBM and GlobalFoundries are heavily invested in nanotech research at the University at Albany, SUNY. The nanocenter in Albany in recent years has branched out to include research and development facilities in other parts of upstate — in Utica; Canandaigua, Ontario County; and Buffalo.

In contrast, the Hudson Valley has been left behind. It must continue to adapt and change — and do what it can to diversify its economy as much as possible. The Hudson Valley still has a considerable high-tech presence that can be touted and promoted as well, including IBM's Poughkeepsie plant that makes mainframe computers and provides service to an array of customers. Those just elected (or re-elected) as state and federal representatives must understand that private-public partnerships are critical to seeing the valley's high-tech and other industries grow. Surely, lowering taxes and energy costs would help greatly, but the area also has legitimate infrastructure needs, and sewer, water line and other upgrades and improvements that could lure business expansion and startups.

The IBM/GlobalFoundries deal does provide clarity, after months of speculation when all sorts of scenarios were being bandied about and explored. But, in answering several questions, the deal also reveals the challenges the Hudson Valley faces in the ever-changing competition for the best technology and jobs.