* Updated with additional comments from IBM & Brian Dubie's campaign *
Republican Brian Dubie dropped this bombshell at Tuesday night's debate in St. Albans: IBM would move its Vermont-based manufacturing jobs to Bromont, Quebec if Vermont Yankee closes in 2012.
How did he know this? Dubie wouldn't say at the debate. His campaign subsequently failed to respond to email and phone messages asking just who at IBM relayed the information to the lieutenant governor.
When contacted by Seven Days, however, an IBM spokesman denied the claim.
Dubie said the news of the possible move was offered while he was at IBM earlier this year to talk about the firm's energy-saving programs. IBM in Essex Junction launched a program to save 1 million kilowatt hours of power in 1000 days, Dubie said. The goal is to do this prior to the possible closure of Vermont Yankee in 2012. "If they can't meet that goal, then I was told they would be moving to Bromont Quebec," said Dubie.
Democrat Peter Shumlin challenged Dubie's assertion that IBM would pack up its microchips and leave. "This is the second time you've said that IBM would go to Canada, and that's quite a statement," said Shumlin. "So I asked IBM today if that was accurate that they would leave the state of Vermont and they said no."
Shumlin didn't identify his IBM contact at the time. Today, Shumlin's campaign said the president pro tem met recently with two top officials at the IBM plant in Vermont: Janette Bombardier, who is in charge of all external relations at the IBM site and John O'Kane, the site's director of governmental affairs.
Despite Shumlin's challenge, Dubie stood by his comment, reiterating that IBM's power costs in Vermont are a constant concern for the multinational corporation. He said not all of Vermont's IBM jobs would be shipped to Canada, but its manufacturing division.
"You had a conversation and I had a conversation," quipped Dubie, considering the issue closed.
Now, add a third conversation.
"IBM has not issued any ultimatum about pulling up stakes and moving to Quebec because of energy costs," wrote IBM spokesman Jeff Couture in an email to Seven Days. "We are concerned about the impact of rising energy costs and are engaged in an active energy conservation campaign to try and hold energy expense steady."
Shumlin chastised Dubie for misspeaking about the state's largest private employer and unjustly striking fear into the minds of Vermonters thinking that IBM would leave Vermont if Vermont Yankee is closed down as scheduled in 2012.
"We have to be careful when we're speaking about the state's largest employer," said Shumlin.
Dubie pounced on Shumlin's statement.
"I agree Peter, that's why I was disappointed when you called a representative of IBM a liar," said Dubie.
Dubie is referencing a 2008 legislative spat between Shumlin and John O'Kane, IBM's director of government relations (i.e. chief lobbyist). O'Kane works out of the IBM office in Essex Junction.
Shumlin, within earshot of a Vermont Public Radio microphone, claimed that O'Kane wasn't being truthful when discussing the impacts a bill requiring Entergy Vermont Yankee to pony up more money in the plant's decommissioning fund would have on ratepayers.
In the end the House voted to go along with the Senate’s plan to force Entergy to cough up that $400 million to shore up the sagging decommissioning fund. Gov. Jim Douglas subsequently vetoed the legislation.
IBM does have a manufacturing facility in Bromont, Que., a town that is between Burlington and Montreal. The site is part of the IBM Systems and Technology Group, which includes the IBM plant in Vermont and its manufacturing site in East Fishkill, New York.
The three most popular gaming consoles in the world — the Microsoft Xbox 360, the Sony PlayStation 3 and the Nintendo Wii — each contain processors assembled and tested in Bromont, according to IBM.
The Bromont site is an assembly and testing facility, which would mean IBM would have to make some significant investments to turn it into a manufacturing plant. The Quebec plant hasn't made microchips at the plant for almost three decades.
IBM's power costs are always a constant concern among business and state officials, given the firm's sizable employment base.
Ironically, IBM's power provider — Green Mountain Power — just brokered a long-term deal with Hydro Quebec. HQ is the provincial power giant that powers the Bromont site, too.
As a major power user, IBM does receive a special power rate approved by the state's Public Service Board, said Dorothy Schnure, GMP's spokeswoman.
"We do not have a special contract with IBM but they are on a transmission rate because they take directly from the transmission system and do not use the distribution system. It is a tariff rate approved by the PSB and they are the only customer on that rate," said Schnure.
That deal offers peak power to IBM at 8.25 cents per kW hour, compared to 8.6 cents per kW hour for other commercial and industrial users.
As for IBM's concerns about the cost of power, Schnure added, "IBM is always concerned about rates and power cost."
Photo credit: Andy Bromage
* * Update * *
A campaign spokeswoman for Brian Dubie said late Thursday the candidate stands by his claim that IBM would move jobs to Quebec if Vermont Yankee closed.
That message was relayed to Dubie in a private meeting between Dubie and a "government relations" official at IBM, said Kate Duffy.
The meeting occurred in March, shortly after the Senate voted overwhelmingly against allowing the Public Service Board to review a proposal to relicense Vermont Yankee beyond its scheduled 2012 closing date.
Dubie was told "in no uncertain terms that the loss of Vermont Yankee would equal the loss of jobs at IBM," Duffy said.
Duffy would not name the IBM official.
However, IBM spokesman Jeff Couture confirmed that Dubie did speak with John O'Kane. O'Kane regularly briefs state officials on IBM's activities and concerns.
Couture, however, maintains that O'Kane didn't issue an ultimatum of any kind. Instead, O'Kane merely explained how some jobs had already moved from Vermont to Quebec in recent years as IBM consolidated some of its test-related work at Bromont. Some of those jobs left the Essex Junction site, though Couture did not say how many.
"Could we lose other test-related jobs to Quebec if Vermont Yankee closes? Possibly," said Couture. "Can we say it will be a direct cause? No. Electricity costs are just one factor."
Unlike the Essex Junction site, the Bromont facility is not equipped to manufacture semiconductors, but merely assemble, package and test.
Couture also clarified IBM's energy-reduction plan, which he said the company briefed state officials about earlier this year.
The company wants to decrease its annual power consumption by 100 million kilowatt hours in three years. That 100 million kW hours represents the equivalent of what IBM has saved in the course of the past 10 years, and 25 percent of its total annual power usage.
"It's an aggressive target, to be sure. We decided to do this because whether Vermont Yankee closes or whether it stays open, electricity prices are going up and we need to reduce our power consumption," said Couture. "Power costs are always a concern for us and we're always looking at ways we can trim those costs."
IBM's annual power bill is roughly $34 million, said Couture.
The Burlington Free Press has also picked up on the story.
This post first published on Thursday, Sept. 23rd at 12:19 p.m.