Bounty blues: IBM Wangaratta plant hangs in balance

The new Federal budget has cast a threatening cloud over the future of IBM's Wangaratta manufacturing plant, according to IBM sources. Should IBM be forced to close the plant, about $500 million in export and domestic product, more than 600 jobs and an elite, world-class manufacturing facility could be lost.

The Wangaratta plant is one of three IBM plants worldwide to build RS/6000 machines, one of four plants worldwide to build desktop PCs, one of nine to build electronic circuit boards and the only one to produce the three ranges from the one site. According to IBM, it contributed more than 80 per cent of IBM's record 1995 hardware, software and services export figure of $626 million.

Senior IBM executives raised doubts about the Wangaratta plant's future in the light of the budget decisions to scrap the computer bounty and retain tariffs on imported computer components. One executive stated that, while cost was one of a range of factors considered in investment decision-making, "any cost impost on the plant will impact on the viability of its operations".

"It's fair to say we have concerns [about the future of the plant]," a spokeswoman for IBM Australia managing director Bob Savage said. "We understand the government's desire to reduce spending [by eliminating the bounty], but [it] must be aligned with the removal of tariffs on imported computer components. We are concerned that the government has made its decision in the absence of any immediate decision on tariffs. One of our problems is that highly built-up computers come into the country with no tariffs, while components - [which often cannot be sourced locally] - come in with tariffs."

The spokeswoman said IBM's position on computer component tariffs is in line with an IT agreement to be tabled at a World Trade Organisation ministerial meeting later this year.

She refused to release details of IBM's assessment of the budget's impact on the plant's viability, citing commercial confidentiality.

More about IBM AustraliaIBM AustraliaWorld Trade Organisation

ARN Directory | Distributors relevant to this article

Comments

Comments are now closed

 
Computerworld
CIO
Techworld
CMO

Latest News

04:00PM
Over a quarter of Australians won’t bank on their mobile: Kaspersky
12:30PM
HDS A/NZ Partner Summit 2014 in Noosa (+15 photos)
12:28PM
The Google shakeup continues: Andy Rubin is out
12:09PM
Impact Systems boss wants to buy 10 resellers
More News
05 Nov
LIVE Webcast: Lessons Learned from the Biggest Security Breaches
05 Nov
vForum 2014
10 Nov
Ascom Myco Launch Event
11 Nov
DCIM Certified Solutions Professional
View all events