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Big Blues: Vermont Braces for a Post-IBM World


Published June 25, 2014 at 10:00 a.m.
Updated November 7, 2017 at 12:37 p.m.

Fair Game is Seven Days’ weekly political column.
IBM's Essex Junction facility
  • IBM's Essex Junction facility

If any of Vermont's top political and economic development officials know what lies ahead for IBM's roughly 4,000 Vermont workers, they're not saying.

But they're clearly bracing for the possibility that Emirate of Abu Dhabi-owned GlobalFoundries "is nearing a deal" to buy Big Blue's chip-making business, as Bloomberg reported two weeks ago. And they're hoping like hell that such a sale won't imperil the high-paying jobs at IBM's Essex Junction and Williston plants, which would likely be included in the transaction.

"Regardless of what name is on the door of the IBM-Vermont enterprise, we all must act immediately and convincingly to demonstrate our state's commitment, our region's commitment to the success and well-being of the IBM enterprise," Greater Burlington Industrial Corporation president Frank Cioffi said Monday afternoon.

Cioffi made the remarks at a Burlington press conference he called to propose a slate of state incentives he thinks might keep IBM — or at least its manufacturing and R&D jobs — in Chittenden County. Though the company has slashed its Vermont workforce in the past decade, it remains the state's largest private-sector employer and contributes more than $1 billion to the state's economy, Cioffi said.

What he wouldn't say was whether the timing of Monday's press conference signaled an impending announcement from the two publicly traded companies.

"I can tell you, from my standpoint, it's June 23 — and earnings reports come out really soon," he said. "So if you understand public corporations, then actions one way or the other sometimes happen after earnings reports."

IBM is scheduled to announce its second-quarter earnings on July 17.

Cioffi's proposals, which include economic incentives and workforce training programs, were dreamed up by GBIC, but Gov. Peter Shumlin said earlier Monday that his administration would "certainly be deploying good chunks" of the plan. Shumlin's newly minted secretary of commerce, Pat Moulton, attended Cioffi's press conference and walked up to the podium midway through to add her two cents.

"The governor has been in touch with the leadership of IBM and at GlobalFoundries to say, 'We're ready for a dialogue when you are,'" Moulton said. "They are very candid that they know the door is open with Gov. Shumlin, with his administration, but that they're not in a position to talk."

Nor has the governor been eager to discuss his conversations with two public companies engaged in high-stakes negotiations. But ever since word surfaced last winter that IBM was putting its chip division on the auction block, his administration has been scrambling to show that it's focused on creating and retaining jobs.

Just 11 days after the Wall Street Journal reported in April that GlobalFoundries had "emerged as the leading candidate" to buy the division, Shumlin proposed a $4.5 million Vermont Enterprise Incentive Fund clearly geared toward IBM or its successor. With approval from top legislators, that money can be dispensed to companies considering closing, relocating or shedding jobs.

Seemingly every press conference he's held since has been focused on jobs, jobs, jobs — including Monday's launch of what his flacks are calling a "Solar Summer Tour," designed to highlight the job-creating potential of his renewable energy policies. The gov can barely get out a sentence without mentioning Vermont's second-lowest-in-the-nation unemployment rate.

Whether all that talk will inoculate him against charges that he presided over the departure of Vermont's most important business remains to be seen. But you can bet that, with an election nearly four months away, his critics won't stay quiet.

One of them, Vermont Republican Party chairman David Sunderland, says Shumlin's "lack of attention" to IBM's transportation infrastructure and the price of electricity has contributed to its potential exit. He also faults Shumlin for heading to Chicago this week for a Democratic Governors Association fundraiser, after which he plans to take a five-day vacation.

"What I think is most concerning is that while a good portion of Chittenden County and most of Vermont is on pins and needles waiting for word about what might happen to thousands of jobs, our governor is on his way to a fundraising event for the next two days, followed by time off," Sunderland says. "We need a governor who will roll up his sleeves and fight for jobs."

Sure, the optics aren't great, but it's not like those jobs would be any safer if Shummy spent the week putzing around the fifth floor of the Pavilion State Office Building, rolling up his sleeves and waiting on hold for IBM CEO Virginia Rometty. Whether Big Blue sells to GlobalFoundries will be driven by global market forces and shareholder demands — not by the few million bucks the state can scrounge up from beneath the couch cushions.

A better question is what exactly the administration has done — other than open up lines of communication — to prepare for a change in ownership. On that, Moulton's response was rather squishy.

"I mean, there are so many contingencies. It's almost impossible to put together a plan," she said. "But we've faced plant closings in the past, and we're ready to respond with appropriate resources for affected people."

Despite dire predictions, Moulton said it's entirely possible the state "could hear news that's positive for Vermont."

"I sincerely doubt that 4,000 people are going to get pink slips overnight," she said. "And so I believe there will be time to prepare if, in fact, there is a decision to close that plant."

Rabbit, Run

For much of Saturday's Republican State Committee meeting, gubernatorial candidate Scott Milne lurked in the back of the Montpelier Elks Country Club, taking in the scene.

Before him, party leaders discussed how to bolster the party's meager fundraising apparatus, support its legislative candidates and reverse what Sunderland repeatedly called a "slide" from relevance. Key to that, the party chairman said, was ending the intramural feuding that has divided and distracted the GOP in recent years.

"Already this year, we have seen potential donors turn away from the party due to negativity, exclusion and what one large donor said was 'a failure of some to see the value of success of others,'" Sunderland said.

As the meeting wrapped up, a party member made a motion to hear from the statewide candidates in the room. After Lt. Gov. Phil Scott and fellow gubernatorial candidate Steve Berry of Wolcott addressed the crowd of 70, Milne took his turn.

"I think there's an opportunity to win," he said, launching into a conventional, three-minute stump speech focused on combating the "Democratic supermajority" and restoring balance to Montpelier.

Then something strange happened: Milne digressed into a four-minute, hare-raising discourse on his youthful adventures buying rabbits in Wolcott and rearing them for sale.

"If you're into making money, I mean, you can make a lot of money if you can figure out how to sell them," he said to nervous laughter.

Milne went on to describe how much his out-of-state relatives enjoyed watching his specimens copulate.

"One of their favorite activities, my two older aunts, when they came to Vermont, was to sit in front of the mink cages from Wolcott and watch rabbits breed," he said.

After the meeting came to a close, Milne asked a small group of reporters in the parking lot outside, "How do you think the rabbits-having-sex joke went over in there?"

"I thought it was, uh, a novel approach," one reporter ventured.

"I saw a couple of people sort of grimacing," Milne confessed.

And then he launched into the story again.

"She just loved sitting in front of that cage, watching the rabbits have sex," Milne said. "It was just so funny."

Ready for ... Bernie?

Sen. Bernie Sanders' (I-Vt.) proto-presidential campaign continues this weekend with another trip to the distant, first-in-the-nation primary state of New Hampshire. He's scheduled to speak Saturday at a bookstore in Warner and at the Hillsborough County Democratic Committee's Grassroots Dinner in Milford.

But before Sanders shifts his focus to the Granite State, he might consider touching base with his colleagues in Vermont's three-man congressional delegation. So far, they sound more inclined to support former secretary of state Hillary Clinton.

"I told her if she decided to run I would support her and would be willing to do whatever she likes," Sen. Patrick Leahy (D-Vt.) told Vermont Public Radio's Bob Kinzel last week, recounting a conversation he had with Clinton in October 2012. "I've made no secret of that ever since then."

And what about Rep. Peter Welch (D-Vt.)?

"Peter said he will wait and see who runs before he decides who he will support," Welch spokesman Ryan Nickel tells Seven Days. "He hopes Secretary Clinton does run and believes Senator Sanders will bring an important and credible voice for working Americans to the campaign should he choose to get in."

Ooof. With friends like these...

Spin City

The Montpelier lobbying firm Sirotkin & Necrason lost its senior partner to the Vermont Senate in January, when Shumlin appointed lobbyist Michael Sirotkin to fill a seat vacated by his late wife, Sally Fox.

Now the Senate is losing an all-star staffer to Sirotkin's old firm, the newly renamed Necrason Group. Joining the lobby shop July 1 as a managing senior associate is Rebecca Ramos, who spent the past two years essentially running the Senate, as President Pro Tem John Campbell's chief of staff.

"I've known Rebecca and observed her career for 20 years," says firm president Adam Necrason. "She's an excellent strategist, communicator, manager and a warm and welcoming person."

The Alabama native and Vermont Law School grad previously served as an attorney and legislative liaison in former governor Howard Dean's administration and as Welch's assistant, back when he helmed the Senate.

"It's the best firm in the state, and I'm fortunate to be a part of it," Ramos says. "The clients they represent, the campaigns they work on and the people that make up the firm are all respected and have integrity and care about Vermont."

Those clients include Renewable Energy Vermont, the Marijuana Policy Project, Comcast and several labor unions.

How went the passage through Montpelier's ever-spinning revolving door?

"It is the nature of the business," Ramos says, noting that she took a month off between leaving the Senate and joining the firm. "Relationships are a part of any business, whether you're a press person or you own a coffee shop."

For his part, Necrason says he never approached Ramos about a job while the legislature was in session.

"Rebecca joining our team is not really dependent on her most recent position," he says. "Her career and talent is what she brings."

Media Notes

Circulation has plummeted at the Burlington Free Press, but subscription prices are on the rise.

Last month, Seven Days reported that weekday print circulation at Vermont's Gannett-owned daily had dropped nearly 23 percent in the past year. Starting July 1, the price of home delivery will jump just as precipitously for many customers.

How much appears to vary from household to household. One subscriber who contacted Seven Days said his daily home delivery was increasing from $19.78 to $29 a month — that's $237 to $348 a year. Another said his was up from $22.17 to $28 a month, while a third increased just $2, to $22 a month.

Those hikes are on top of a 31 percent increase the paper announced two years ago. Unlike back then, when the Freeps announced the price spike alongside a much-ballyhooed redesign, nary a word has been printed in Vermont's paper of record about this increase. Instead, word came by an even more ancient medium: snail mail.

"We don't take this action lightly but believe that this rate for receiving direct delivery of local news in whatever format you prefer is a tremendous value," Gannett vice president for customer service Barbara Smith wrote.

Burlington Free Press publisher Jim Fogler declined to comment.

The original print version of this article was headlined "Big Blues"