Cuomo: N.Y. monitoring IBM-Global talks

(Photo: Chris Cusumano / Poughkeepsie Journal)

ALBANY – Gov. Andrew Cuomo says the state is "monitoring" negotiations between IBM Corp. and GlobalFoundries as IBM looks to sell its chip manufacturing facilities, a move that would have a dramatic impact in New York and notably in East Fishkill.

The comments are the latest confirmation that the talks are still on.

New York plays a critical link between the two companies: They are both heavily invested in the research at the State University at Albany nanocenter, giving the state unrivaled leverage in a potential sale that could affect many of the estimated 14,000 IBM jobs in the state.

State officials are pressing the companies to keep all the jobs in the state under any sale. About half of the IBM jobs in New York are in Dutchess County. Several thousand are estimated to be involved in the Microelectronics Division, which has its main chip-making facility in Wiccopee, East Fishkill.

"We're monitoring the conversations," Cuomo told reporters Wednesday in Albany after he received the state Business Council's endorsement of his re-election bid. "It's a private-sector transaction, but it obviously has relevance to the state. It's a lot of jobs, big companies; so we're monitoring, but not interfering."

He added that the state is "involved tangentially."

The Journal's Albany bureau reported last month that IBM, headquartered in Armonk, Westchester County, and GlobalFoundries were headed to arbitration in the latest bid to reach a deal for IBM to sell its semiconductor operations.

IBM is believed to be eager to sell its semiconductor chip manufacturing assets in East Fishkill and Burlington, Vermont, to GlobalFoundries — the Abu Dhabi-owned company that has a growing chip factory in Malta, Saratoga County. IBM has said it plans to keep research and design functions as part of a $3 billion investment, mainly in New York.

Because IBM has not even confirmed the existence of the discussions, no official details are available, leaving workers to worry about their jobs and casting clouds over the future of the Dutchess County economy, where IBM remains the largest private employer.

The price tag appears to be the holdup in the sale. Some news reports have said IBM would have to pay GlobalFoundries to take the facilities off its hands, for as much as $2 billion, but some industry analysts have expressed skepticism about that idea.

A GlobalFoundries spokesman said Wednesday the company doesn't "comment on rumor or speculation." There was no immediate comment from IBM, whose position has consistently been the same.

IBM is a leading investor in a $4.4 billion deal reached in 2011 to expand research and development in New York, mainly at the SUNY College for Nanoscale and Science Engineering in Albany.

In February, IBM and Cuomo agreed to keep 3,100 high-tech jobs in the Hudson Valley and surrounding areas through 2016. The deal was part of IBM's expansion in Buffalo to create 500 jobs at a $55 million high-tech hub, which the state will help build.

The jobs pledge staved off most IBM layoffs earlier this year, even as cuts were made across the country.

Now New York is believed to be looking for a bigger jobs commitment if IBM and GlobalFoundries can reach a sale agreement. New York owns the equipment and facilities that IBM uses for research and development in Albany.

IBM also has facilities in Endicott, Broome County, with about 700 workers, along with its offices and plants in Westchester and Dutchess counties, including its mainframe plant in Poughkeepsie.