February 23, 2009 Timothy Prickett Morgan
“All politics is local.” That was the lesson that Tip O’Neill, the legendary Speaker of the House of Representatives, learned when he lost his first political battle, which was to try to get onto the Cambridge, Massachusetts city council. It was the only election O’Neill ever lost, and he had pretty good job security in his district and in Washington until he retired in 1987. Like many of you in the IT sector, I am beginning to wish that all employment was local. And it just isn’t.
Get some coffee, put on your walking shoes, and take a walk with me for a minute or two.
I grew up in rural New Jersey, in the Kittatinny Mountains that are part of the Appalachian range here on the East coast. My parents and my uncles and aunts did not go to college, and they worked in factories to the south making all manner of things, from transistors to turbine bits to metal stamping equipment to artificial knees and hips to various chemicals that ended up in heaven only knows what. At one point, my two uncles, their wives, my great aunt and my parents were all working in the same factory in Dover, New Jersey, and when I started college, I worked there, too, for a very lucrative summer job that helped put a dent in tuition. In the late 1980s, just as I was graduating from college and trying to figure out how to start a career as a writer, my father and his two brothers bought a 289-acre former dairy farm in Steuben County, New York, just a little west of Corning. We all knew the area because after my grandparents divorced when I was about 10 years old, my grandfather ended up in the Southern Tier, as the area is called, and we visited often. Anyway, the idea behind the farm was to retire there someday, with kids and grandkids and cousins of all kinds being close together, helping each other out. But then, my parents and uncles and aunts all lost their manufacturing jobs in New Jersey in the 1990s, and they dispersed around the country to find work. Only my parents eventually ended up moving to the farm, and they are still there.
As I have said in this newsletter a few times before, my family’s farm is not very far as the crow flies from where Tom Watson, the founder of IBM, grew up, and we were often driving through the area where Watson cut his teeth and where IBM was originally headquartered outside of the city of Binghamton, New York, which is the confluence of Susquehanna and Chenango rivers. Not only was IBM founded here, in nearby Endicott, but so was Dick’s Sporting Goods and Link Flight Simulators. And of course, there was the Endicott-Johnson Shoe Company, a company so powerful that two suburbs of Binghamton–Endicott and Johnson City–bear its names. Endicott was actually a planned community that was created by the shoe giant, which was a bit like the Nike of its time, and Watson worked in the shadow of the shoe manufacturer and its legendary manager and owner, George Johnson. In Binghamton, E-J Shoe was the blue collar firm, famous as the home of the “Square Deal,” and IBM was the white collar firm, famous for its strict and uniform culture and its strong belief in research and development.
Which one does history remember more? Well, at this point, IBM, of course. But we’ll see how Big Blue holds up over time. It certainly doesn’t have much of a reputation today in Endicott, except for its historical support of that community. This is where rack-based computers were invented and where, among many other things electro-mechanical and computing technologies, the AS/400’s original processors were designed.
I have always thought that IBM can do more with Endicott, and other current and former IBM towns, than it does. I think that other American-based companies should do the same, but this is the example I always come back to.
Whenever I read about Microsoft, IBM, Intel, and other tech giants complaining on the one side of their mouths about the lack of technical skills in the United States and their ongoing need for H-1B visas as programmers and engineers are going without jobs, I think of Endicott. Whenever I see an IBM lab pop up as IBM offshores tech jobs to India, China, and other emerging economies, I think of Endicott.
I thought of Endicott again recently when I caught wind of a hush-hush job relocation plan IBM has launched called Project Match, which comes as IBM lays off an untold number of employees worldwide thanks to the economic meltdown. Under this program, IBM is offering employees who might otherwise be laid off a chance to keep their jobs if they relocate to emerging markets like China, India, and Brazil and they agree to be paid the local prevailing wages. InformationWeek broke this story a few weeks ago, and not many details are known. But the story has been making the rounds in the business press.
Tom Watson compendated his employees well and rewarded them for their hard work. No question about it. But Watson was always more concerned with IBM than his people. However, I think that Johnson did Watson one better, even though few know it. Johnson didn’t just compensate his 20,000 employees, he took care of them and the city that they lived in. Franklin Roosevelt gave us the New Deal, but decades before that, George F, as he was called, a man who worked his way up from the tanneries, acquired half of the company’s stock, and ran E-J until he died in 1948, gave his employees what he called the Square Deal. You can read all the details here, but Johnson had all of these funky, new age, progressive ideas way back in the 1920s. E-J built and financed homes for workers, built hospitals that employees got their healthcare from, built libraries, parks, theatres, markets, and other facilities for employees. George F sure as hell knew how to keep the unions out–as did the non-unionized factory that my family used to work in. Give employees a great place to work, help make their lives better, and they will bust their humps for you. I am not anti-union, and I am not so naive as to not recognize that there are dangers to working and living in a company town. But what a contrast 100 years makes in a small upstate city.
While Project Match seems like a good alternative to joining the Peace Corps for young and single IBMers, it is a bit of a cruel joke to someone who is trying to raise a family. Who has roots in a place, and family nearby.
Project Match is a million miles away from the kind of employer who used to be just down the road from a nascent Big Blue. I know that the kind of welfare capitalism that Johnson espoused probably cannot be maintained, even for a short span of a few decades, without something akin to a monopoly. But I sure would like for some smart company–Google could do it–to prove me wrong and create good jobs and loyal employees right here, where I want to continue paying my taxes and live in the U.S. of A. And good jobs that stay here. Even if the Square Deal is a fleeting one–cheap foreign labor killed off E-J in the 1960s and it may eventually do the same to IBM’s presence in the States by the 2020s–it is one that I crave. And I suspect that you do, too.
Forget Project Match. I want something called Project Rematch. Or better still, Project Roadtrip. So here is what I propose to Sam Palmisano, IBM’s president, chief executive officer, and chairman, who has spent the past three months arguing for an IT-heavy stimulus bill that will be a tax burden on our backs while at the same time offshoring tens of thousands of jobs since he took over Big Blue. Pick a few days at your convenience, Sam, maybe in March. I will swing north up to Armonk and pick you up at the office in my powder blue 1995 Ford Taurus station wagon–an AS/400 of a car if there ever was one, right?–and we will cut out across the Catskills and then onto Route 17 up through the Delaware and Susquehanna river valleys until we stop for lunch at the Blue Dolphin diner in Apalachin. (They have amazing deserts, all baked right there, and very good coffee.) After lunch, we’ll make our way to Binghamton University, the anchor school of the State University of New York system, and after IBM renews a serious academic-private partnership with the Thomas J Watson School of Engineering and Applied Science, committing to making local jobs for local engineers, and maybe even getting a serious Division IA college football team there for SUNY and getting New York in the Big Ten where it belongs, we’ll mosey on west out of town to Endicott. And we’ll talk about the interesting things that IBM could do, right there, right now. I’ll even pick up the tab for gas, and let you bring your iPod and pick the tunes, Sam. This is far more doable from my end–and more worthwhile as far as I am concerned–than your invitation to me three years ago to invite me to an industry analyst meeting in Bangalore, India. What do you say, Sam? You got my number.