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

 

Latest News

01:17PM
New .sydney domain fuels online real estate boom
11:52AM
NICTA appoints former La Trobe professor as new director
11:28AM
Aussies pay rent using bitcoin
11:04AM
Apple Pay and iPhone 6 to spark Australian mobile payments boom: EMerchants
More News
29 Sep
Vendor and Supplier Management Workshop
30 Oct
Ovum 2020 Telecoms Summit
05 Nov
vForum 2014
25 Nov
GovInnovate Summit
View all events