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.

2014 ARN Women in ICT Awards - Nominations close October 27!: Nominations have opened for WIICTA 2014 and will stay open until October 27. But don't be late, be among the first in and NOMINATE NOW!!!

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

02:05PM
20th Century Fox deploys HP Moonshot servers
01:27PM
Adobe begins encrypting user data collected from Digital Editions app
12:17PM
St George turns on fingerprint login for Apple iOS Internet banking
12:01PM
DDoS attacks skyrocket: Akamai State of Internet Report
More News
29 Oct
NewLease & Microsoft Technical Sessions
30 Oct
Ovum 2020 Telecoms Summit
30 Oct
NewLease & Microsoft Technical Sessions
05 Nov
vForum 2014
View all events