Vermont’s Economy: What Could Be 
By Robert Maynard

The speculation regarding the demise of the IBM Microelectronics plant here in Vermont has turned out to be a little premature. When the state of the art 300mm plant FAB 2000 was built in Fishkill NY, many thought that decision spelled the ultimate doom of the aging 200mm plant here in Vermont. I remember being on a cost cutting team at IBM in 1998 when we got a visit from one of the New York executives. The speculation at that time was that FAB 2000 was going to be built right here in Vermont at the existing site. The internal logic pointed in that direction. The "Burlington Plant", as it is known was on the cutting edge of technological innovation and some of the best minds were already here. When I posed the question to the New York executive whether Vermont would be the site of FAB 2000, his answer was "absolutely not, the taxes are too high here". I talked with some other managers later and they said that the problem was the whole package of high taxes and excessive regulation.

With the potential expansion of the Vermont Plant shot down, many thought that it’s future was in jeopardy. The idea was that 200mm plants were on their way toward irrelevancy. A funny thing happened since then. The proliferation of smaller digital electronic end user devices has given the 200mm plant a new lease on life. While I was still at IBM, I remember dealing with a company that sells global positioning systems. They were thinking of using IBM as their sole supplier and were worried whether we had the capacity to handle their planned expansion. In this current edition of the True North website, there is an article about IBM Burlington winning a contract with RFaxis to Manufacture Its RF Front-End Integrated Circuits. According the RFaxis’ President, the reason for the decision is that "IBM's expertise in manufacturing and supply chain management coupled with their superior technical merits make them a perfect fit for RFaxis, and we are confident that the addition of their process development and foundry services will help RFaxis meet and exceed the expectations of our customers worldwide"

Other cutting edge companies choose IBM for its patented copper wiring technology. The point is that we have a world-class technology leader right here in Vermont and we seen to be doing everything in our power to drive it away. Numerous promising companies have already beat feet for the exits. We lost out on a chance to land IBM’s big next generation 300mm plant FAB 2000 because of our crippling tax and regulatory policies. There is no indication that we have learned a lesson from that loss, as these policies are on the verge of getting even worse. Add to that the problems with an aging and archaic transportation infrastructure and the very real possibility that we are about ready to make the most idiotic decision one could imagine and shut down our most reliable source of electricity in Vermont Yankee. Are we now on the verge of losing out in the reemergence of 200mm plants as suppliers of the microelectronic devices that power a new generation of digital electronic end user devices?

Vermont still has the potential to be a key player in the coming technology boom in spite of its political ineptitude. To do so, we need to change course and remove the shackles that kill off growth and innovation.

Robert Maynard is the Editor of the True North website