Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Iowa Spent $50M to Lure IBM. Then the Firings Started

bloomberg.com

Post reply on HN
Print view View original

41–50 of 72 posts

Re: Iowa Spent $50M to Lure IBM. Then the Firings Started

#41

Post by s73v3r »

scarmig wrote: post #9
fennecfoxen wrote: post #7

Earlier quoted context omitted.

> Anyone who would pursue IBM in hopes of 'incubating a startup scene' is, not to put too fine a point on it, grossly incompetent. Indeed -- and just one of the most painfully obvious illustrations of why the "high taxes with favored big companies getting tax breaks" strategy is a lot less fair and efficient than the "medium-low taxes for everybody" strategy. (Of course, the latter doesn't give the politicians any ch…

There's a multitude of interpretations there, but to me the obvious(TM) takeaway is that corporate taxes should be zeroed out for everyone, and income/consumption/environmental taxes (take your pick of weighting) increased to make up for it.

The company fucked over the communities is received tax breaks from, so they should be rewarded with simply not having to pay taxes at all? What kind of backwards ass thinking is that? If I don't pay my taxes next year, can I get the same deal?

Re: Iowa Spent $50M to Lure IBM. Then the Firings Started

#42

Post by eropple »

amyjess wrote: post #20
brandonl222 wrote: post #19

Earlier quoted context omitted.

Who?

http://softlayer.com Surprised you haven't heard of them -- they're a pretty big player in the datacenter space. Also, I know for a fact that a good chunk of Linode's servers are actually hosted at Softlayer DCs (e.g. any Linode server hosted in Dallas is physically at Softlayer's DAL-2 location, which used to be called The Planet). My best friend is a tech there, he joined right after the acquisition, and he tells m…

Yup. Between Softlayer as an IaaS provider and BlueMix as a PaaS provider, IBM has top-shelf (not the best, but close) cloud talent and tooling.

They aren't sexy, which is probably why they don't get much play on HN, but they're important and influential.

Re: Iowa Spent $50M to Lure IBM. Then the Firings Started

#43

Post by djrogers »

'Spent' is an interesting word here, given that this was entirely done in tax breaks. It's not as if the state's coffers have $50m less than if they hadn't done this deal at all - in fact it was still likely a net + for them.

If they hadn't given the tax breaks then IBM wouldn't have come at all - bringing zero dollars with them. At least this way there are hundreds of people employed, land being rented, utilities being used etc.

Oh, and according to the article the tax breaks were suspended when the number of employees dropped too low - perhaps that minimum number could have been set higher?

Obviously this didn't turn out as well as the state wanted it to, but it's not like it actually cost them any real dollars in the long run...

Re: Iowa Spent $50M to Lure IBM. Then the Firings Started

#44

Post by djrogers »

scarmig wrote: post #33
Geekette wrote: post #17

If city officials bothered with a little research (assuming they don't already know), they'd find several examples of Big Co. entering and leaving small cities and towns without creating economic value equivalent to the huge incentives used to lure them in. Very similar to how officials chase Olympic hosting bids, even when history clearly shows that the legacy is additional debt and underutilized facilities (e.g. pu…

Or even just leaving the money in people's pockets. I'm not a person who thinks that all government destroys value, but this is a pretty clear example of a time when the government extracted millions of dollars of productive resources and poured it into an idiotic scheme. Everyone would be better off today (except IBM's investors) if the city officials responsible for this fiasco had just been given a free lifelong v…

Why do you think any money was actually spent on this? These were tax breaks - a reduction or elimination of tax payments that IBM wouldn't have made is they hadn't moved in anyway. How is that taking money out of people's pockets?

Re: Iowa Spent $50M to Lure IBM. Then the Firings Started

#45

Post by beambot »

marpstar wrote: post #38
wtbob wrote: post #5

> It’s a blow to Dubuque and Columbia, cities that spent a combined $84 million on tax breaks and other incentives to lure Big Blue in the hopes of attracting other technology firms and incubating a startup scene. Anyone who would pursue IBM in hopes of 'incubating a startup scene' is, not to put too fine a point on it, grossly incompetent. > Instead, Ross found herself toiling on what she described as a new-age asse…

Dubuquer here. This was totally the City of Dubuque's attempt to grow (establish?) a tech scene. Dubuque doesn't have enough computer science graduates to support it. I'm at the biggest "software" company in the city, and we can't find quality talent within an hour commute. As others in the thread have stated, this place was a glorified call center. No research or development going on. I have friends who still work t…

> I'm at the biggest "software" company in the city, and we can't find quality talent...

> the average pay at IBM was $46,000

I think I can solve your talent problem, and I won't even charge you for the insight: Pay more.

Presumably you're in a high-margin (software!) industry. If revenues are reasonable, then you can afford to pay higher salaries. Given the untethered lifestyle of younger generations, you're effectively competing with the entire nation. Even SFBA, with its absurd cost of living, offers a better pay-to-living situation than $46k in Iowa.

But there's good news! With housing in Mountain View at all time highs (yes, a 2 bdrm home runs ~$800k)... there's lots of good software engineers who spend a few years here and then look to the MidWest. The classic relocations are to Austin TX and Boulder CO. Pay up, and you might have an easier time recruiting people heading back to the MidWest. (BTW: I'm from Nebraska.)

Re: Iowa Spent $50M to Lure IBM. Then the Firings Started

#46

Post by tjr »

marpstar wrote: post #38
wtbob wrote: post #5

> It’s a blow to Dubuque and Columbia, cities that spent a combined $84 million on tax breaks and other incentives to lure Big Blue in the hopes of attracting other technology firms and incubating a startup scene. Anyone who would pursue IBM in hopes of 'incubating a startup scene' is, not to put too fine a point on it, grossly incompetent. > Instead, Ross found herself toiling on what she described as a new-age asse…

Dubuquer here. This was totally the City of Dubuque's attempt to grow (establish?) a tech scene. Dubuque doesn't have enough computer science graduates to support it. I'm at the biggest "software" company in the city, and we can't find quality talent within an hour commute. As others in the thread have stated, this place was a glorified call center. No research or development going on. I have friends who still work t…

I'm at the biggest "software" company in the city, and we can't find quality talent within an hour commute.

This is your company?... http://www.cartegraph.com/careers

Had I stumbled upon your website on my own, I would get the distinct impression that you are presently NOT looking for any developers, since the only jobs listed are in sales.

If you'd consider hiring someone to work remotely 3-4 days a week and drive in to Dubuque 1-2 days a week, I'd think you'd get some hits from Cedar Rapids, which might be enough to broaden your options.

Re: Iowa Spent $50M to Lure IBM. Then the Firings Started

#48

Post by 1123581321 »

rrich wrote: post #25

Motorola basically did the same thing in a Northern Illinois community. I think the massive site stayed open a little more than a year. It still today remains a huge empty space sitting in the prairie some fifteen year on.

Similar outcome, but happened for different reasons. The CEO lived in McHenry and, essentially, wanted work to be closer to his house. When the plant was closed, it was because Motorola had been fundamentally mismanaged, which is different from IBM's cost-cutting to maintain its successful strategy.

I am in the Rockford area and saw a lot of friends suffer financially because of Motorola's missteps. Rockford also competed with Dubuque to get IBM, and for the same reasons (vague intentions to anchor a tech scene), but was disqualified early in the selection process because it didn't have a minimum threshold of college graduates.

Re: Iowa Spent $50M to Lure IBM. Then the Firings Started

#49

Post by pacaro »

acveilleux wrote: post #37
pacaro wrote: post #11

Earlier quoted context omitted.

The city should just embrace sunk costs, I mean, double down, and invest in helping the laid off workers create a startup scene. That at least has a hope in hell of achieving something

Most of the people in that IBM operation were probably help desk or equivalent. There's not the base skills to create a startup there. If they had the skills, they'd have moved, not taken a 46k/yr (mean) jobs from IBM. That's the recurring story with just about any small rural place. You need a critical mass to get going and it's just not available locally. Maybe given a large university with a strong tech program yo…

I hear you, and I probably agree, but the entrepreneurial spirit can be found in the most unlikely of places, and whatever the je ne sais quoi is that makes a great founder might well be as common among "help desk or equivalent". Many people with great skills are in unlikely places because other factors in their lives are reducing their choices. I worked for a bootstrapped startup in rural England that made a successful exit (acquisition by Microsoft), you never know.

Re: Iowa Spent $50M to Lure IBM. Then the Firings Started

#50

Post by marpstar »

tjr wrote: post #46
marpstar wrote: post #38

Earlier quoted context omitted.

Dubuquer here. This was totally the City of Dubuque's attempt to grow (establish?) a tech scene. Dubuque doesn't have enough computer science graduates to support it. I'm at the biggest "software" company in the city, and we can't find quality talent within an hour commute. As others in the thread have stated, this place was a glorified call center. No research or development going on. I have friends who still work t…

I'm at the biggest "software" company in the city, and we can't find quality talent within an hour commute. This is your company?... http://www.cartegraph.com/careers Had I stumbled upon your website on my own, I would get the distinct impression that you are presently NOT looking for any developers, since the only jobs listed are in sales. If you'd consider hiring someone to work remotely 3-4 days a week and drive i…

I should've clarified that we aren't exactly HURTING for developers, but when positions are open they stay open for awhile.

We're generally looking for people already up to speed on our stack (which isn't to say this is an explicit requirement) with a few (2+) years experience. We generally hire interns during the summer and many of them have go on to become FTEs.

We have remote employees (in Iowa) and a second office in Colorado, but being just a medium size company, it's hard for us to compete with McKesson (across the street from us), Rockwell Collins, Deere, etc for such a small talent pool.

Post reply on HN