ALBANY- New York and IBM announced a sweeping agreement Monday that will include the state's nanotechnology center paying $55 million to open a high-tech center in Buffalo with 500 jobs in exchange for preserving and adding jobs in the Hudson Valley.
The agreement includes a commitment from IBM to keep at least 3,100 high-tech jobs, mainly in Dutchess County, through 2016. It includes adding 750 jobs in the semiconductor industry that were mainly lost in Dutchess County last year through downsizing.
"IBM is the right partner to have. They are a great New York corporation," Cuomo said near Buffalo on Monday.
Dutchess County Executive Marcus Molinaro praised the agreement.
"The news today is good. It's good for those who will not lose their jobs," Molinaro said. "It is good for those who may be reemployed by IBM, and it's good for Dutchess County – in the context of stabilizing job losses and focusing on recovery."
But the agreement also left a number of unanswered questions as IBM plans another round of cuts this week. IBM spokesman Doug Shelton declined to offer any details, saying it was the state's announcement.
The union representing IBM was skeptical of the agreement amid hope that Monday's deal would also spare New York from the latest round of job losses. The union said it's received no assurance that IBM wouldn't cut jobs in New York this week.
Dutchess County alone employs 7,000 IBM workers, said Lee Conrad, national coordinator for Alliance@IBM, CWA Local 1701, which is based in Binghamton.
"There are 7,000 (jobs) in the mid-Hudson Valley now," Conrad said in an email. "Doesn't that leave a lot of room for further job cuts? How is this good?"
IBM has deep roots in New York and has a major financial stake in the development of nanotechnology, which has giving the state leverage to keep jobs.
The company, which is headquartered in Armonk, Westchester County, was the main player in a 2011 deal with the state for a five-year, $4.8 billion investment in nanotechnology.
IBM's agreement with the SUNY College of Nanoscale Science and Engineering in Albany requires IBM to maintain a certain level of employment at its New York operations. So the new deal will require IBM to maintain 2,350 jobs in the semiconductor field, plus add the 750 jobs, at its facilities in Dutchess County, Yorktown Heights and Albany.
But it was unclear how IBM would fill the positions, what locations would get the jobs and whether the job commitment means other parts of its business could face downsizing.
Monday's announcement includes the commitment of $55 million from the nanocenter to create the Buffalo IT Innovation and Commercialization Hub. IBM will be the first tenant at the 100,000 square-foot-facility in downtown Buffalo, which is expected to open next year.
Jim Coughlan, Dutchess County's comptroller, lauded the deal, but criticized IBM for a lack of transparency. He is a Republican candidate for state Senate this year.
"It shouldn't take Watson to figure out the taxpayers' overall commitment to IBM," Coughlan said, referring to IBM's supercomputer. "The state's overlapping deals with IBM are not transparent and more importantly, there is no clarity."
IBM's first manufacturing facility was in Endicott, Broome County, in the early 1900s. The union estimated that IBM has about 14,000 employees in New York, including 740 in Endicott.
IBM's future in New York, particularly in the Hudson Valley, has been cloudy. The company cut 697 jobs in Poughkeepsie and East Fishkill last September, the latest in a series of local layoffs.
Molinaro said the agreement buys the state and the area time to work with IBM as it refocuses the company refocuses its businesses.
"We recognize that IBM will continue its restructuring," Molinaro said. "They are certainly looking at expanding areas of their global business that will lessen its footprint at some of its Dutchess County facilities over time. Our goal is to work with them."
The Financial Times reported Feb. 7 that IBM is exploring a sale of its semiconductor business and has appointed Goldman Sachs to consider buyers. Among potential buyers could be GlobalFoundries, which is closely tied to the Albany nanocenter and has a major manufacturing facility in Saratoga County.
The nanocenter in Albany in recent years has branched out to include research and development facilities in Utica; Canandaigua, Ontario County; and Buffalo.
IBM has has been criticized in recent years for the tax breaks it has received in New York, even as it downsizes.
A report last week claimed that between 2000 and 2013, IBM received $880 million in tax breaks from state and local governments in New York to expand operations.
Cuomo, however, defended IBM.
"IBM also has a reputation of one of the international leaders in technology," Cuomo said.