Gerstner dodges questions on IT economy
New IBM chip plant more important
Big Blue's big cheese Lou Gerstner dodged questions on the state of the IT economy today while trying to promote his company's latest venture.
The CEO and chairman of IBM stood in front of the stars and stripes in the State of New York Executive Chamber office of Governor George Pataki. He waxed lyrical on the PC vendor's plans for a $2.5 billion chip plant in upstate New York, as reported here earlier.
But after the 15-minute announcement to journalists he was asked about the current state of IT share prices on the stock market. How could he reassure investors that all was well?
Gerstner refused to comment, saying he was only at the conference to talk about the plant announcement.
The question was especially relevant as IBM's share price dropped $3.19 today to $114.75. And Big Blue is due to record its Q3 results on October 17 amid a plethora of profit warnings from rivals including Dell and Intel.
What did emerge is that IBM's 300mm chip plant will be constructed inside its old factory, which made chips on smaller wafers from 1985 to 1993. And incentives from New York State totalling $475 million - including wage tax credit, investment tax credit, real property tax credit and sales tax exemptions - helped twist Big Blue's arm not to build the factory elsewhere. The plant will be able to operate virtually tax free for up to ten years, according to a statement from Governor Pataki's office. ®