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IBM kills off Irish server works

190 more jobs go to Asia

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The Irish Times reports that Big Blue is killing off the remaining server manufacturing jobs in its Emerald Isle factory, and shifting the server-making to its factories in Shenzhen, China.

IBM's labor pool in Ireland is now estimated to be somewhere around 4,000 workers. That figure includes the 190 jobs subtracted this week — which should be gone by February or March of next year — plus the 200 employees that Big Blue added in March of this year for a Smarter Planet research center, and another 100 that were added to IBM software labs in Dublin, Cork, and Galway back in June.

In January, IBM said that it was moving its high-end server manufacturing for the EMEA and Asia/Pacific regions to factories in Singapore, but kept a toehold in the European Union by retaining entry and midrange server manufacturing in its factory in Mulhuddart outside of Dublin.

The Singapore factory opened in May, and is a $90m facility for making high-end Power Systems and System z mainframe machines. This Singapore factory makes the same high-end boxes that Big Blue puts together for the Americas market in its Poughkeepsie, New York, facility. The Singapore plant also makes IBM's disk and tape storage hardware.

Big Blue has long-since shut down its x64 server plants in Scotland and outsourced all of these excepting very high-end System z and BladeCenter platforms. IBM also moved its Power Unix manufacturing out of Austin, Texas, and consolidated it into its Rochester, Minnesota, plants a long time ago. But IBM was still making entry and midrange Power Systems in Ireland, and still makes Power Systems machines in its Rochester, Minnesota, facility for the Americas region.

With this round of job cuts, Ireland will be out of the IBM server manufacturing business entirely, and it is reasonable to wonder when production of entry and midrange Power Systems will be shifted entirely to China. There are a lot of political reasons for IBM to be able to slap a Made in the USA label on a big Power System or mainframe, but the argument is pretty weak for the entry and midrange Power Systems still being made in the Rochester facility where the venerable System/3X and AS/400 minicomputers have been designed and built since 1969.

IBM told the Times that it would try to find jobs for many of the 190 workers who are involved in making entry and midrange Power Systems servers in the Dublin factory, which has ramped up software development and services capabilities in the country as it is cutting manufacturing jobs. (It seems highly unlikely anyone will be able to make the jump, if you think about it.) The paper said that workers will be given five weeks of severance pay for every year they worked at Big Blue.

"This change will place us closer to our growth markets and suppliers," IBM told the paper in a statement, "while providing greater operational efficiency and cost savings."

The shipping costs to get Power and z10 processors to China or Singapore are relatively small, and the relatively expensive shipping costs to get finished Power Systems and mainframe servers to customers in Europe and Africa are well more than offset by the lower labor costs in China and Singapore. ®

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