IBM made state a technology leader

01/27/09 5:51PM By John Dillon
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AP Photo/IBM
(Host) Before there was Silicon Valley in California, there was IBM in Essex Junction, Vermont.

At its peak, IBM employed about 8,500 Vermonters, making it the state's largest private employer.

But the company's impact goes beyond its huge payroll. IBM propelled the state's economy into the 20th century. Big Blue brought high-tech manufacturing and a white-collar culture to Vermont.

VPR's John Dillon has this look back at IBM's history in the state.

(Dillon) In the mid-1950s, the economy in northern Vermont was suffering. The textile mills in Winooski had closed down, throwing thousands of people out of work. Unemployment was around 10 percent.

Harry Behney is the former president of the Greater Burlington Industrial Corporation, which works to attract industry. Behney graduated from Burlington High School in 1949, and recalls that earlier economic slump when people were desperate for work.

(Behney) "And most of my classmates went someplace else because there weren't jobs in the Burlington area... And when IBM came in, things started to change..."

(Dillon) A combination of good luck and careful planning brought IBM here. The company had outgrown its plant in Poughkeepsie, New York. IBM President Tom Watson Junior was a skier who loved to visit his vacation home in Stowe.

So when a subsidiary of the Greater Burlington Industrial Corporation put up a factory building in Essex, and went looking for tenants, IBM moved in.

Tom Soules worked at the plant for almost 30 years. He was there when the doors opened for job applicants on a frigid morning, February 25th, 1957.

(Soules) "It was one of those typical February Vermont days, cold, windy. Had a hundred people in line. And we went to the back of the line, front of the line, so on, found out some had been here since 4:30 in the morning. We thought they would pick up applications and come back later. No way, they said, we waited since 4:30. We're not leaving this site."

(Dillon) Soules was interviewed by IBM to mark the plant's 50th anniversary in Vermont. Within the company, the Essex Junction plant was known as IBM Burlington, after the nearest large city.

Paul Castrucci was site manager when the Vermont plant developed new forms of computer memory. He was also interviewed for the 50th anniversary.

(Castrucci) "The thing that drove the IBM revenue, and the thing that enabled those computers to drive the revenue, was memory. And Burlington was the action. We did it. We were the force function for the IBM growth."

(Dillon) IBM engineers were able to squeeze more and more computing strength onto smaller and smaller wafers of silicon.

(Castrucci) "Our eight inch line was ahead of the Japanese by five years. And the reason we were able to do it, lots of reasons, but one of the main reasons is the Burlington people, the Vermonters."

(Dillon) The Vermont IBM plant now makes components for other companies. John O'Kane is IBM's lobbyist in Montpelier. He says the Vermont chips are found everywhere, from cell phones to GPS devices to copiers to high def TVs.

(OKane) "If you go to a Best Buy virtually every category of products that's there has the potential to have products made in Essex Junction inside.

(Dillon) And as Vermonters changed the world of technology, IBM changed Vermont.

Fade up soundtrack with Schaefer as narrator..

(Dillon) An early IBM promotional film highlights Vermont's role as leader of the microelectronics revolution.

(IBM Film) In this oven at one thousand degrees centigrade, memories for IBM computers are being formed. The process is called semi-conductor technology is one of the most complex and sophisticated in industry today..

(Schaefer) There were upscale real estate developments coming on line to serve IBM's new management and engineers.

(Dillon) Dave Schaefer worked in IBM public affairs from 1968 to 1979. That's his voice from 25 years ago narrating the promotional movie. Schaefer says the growth at IBM was responsible for entire new neighborhoods in Chittenden County.

(Schaefer) Places like Harborwood Shores out on Shelburne Point is one of those. Lakewood Estates in the north end of Burlington and some of those neighborhoods in the new North End, and above all Pinewood Manor in Essex Junction which was basically an IBM enclave at that time. ... That was a boom time for the entire region and for all the builders in the region as well.

(Dillon) Schaefer was at IBM when there was money to spend. He says the company quietly funded many local volunteer organizations, including ambulance services in northern Vermont.

IBM also spent lavishly within the company.

(Schaefer) We had about 400 managers then and we flew about two thirds of them to San Francisco for three or four days. We took over a floor or two of the Hyatt Regency. ... And for the ones who stayed home and tended the store, we took those to Longboat Key outside of Sarasota Florida. .. I chartered some 35 foot sailboats for them to play on. I suspect those kind of things are so far in the past now they're not even considered.

(Dillon) When Schaefer worked at IBM, the company's growth seemed unstoppable. The company added thousands of jobs a year, and opened a store front employment recruiting office in downtown Burlington. An IBM job was almost guaranteed for life.

(Schaefer) "People felt very good about working at IBM. It had kind of a missionary aspect to it. The chances of being laid off from IBM were just about zero. If you were performing your job at all."

(Dillon) But in the last decade, that changed. There have been several large layoffs. From its peak, the Essex Junction workforce has shrunk by about three-thousand people.

For VPR News, I'm John Dillon.

Photo: An unidentified worker at the IBM plant in Essex Junction, Vt., works on manufacturing microchips in this undated file photo. AP Photo/ho/IBM

 

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