The chances of the 64M-bit chip being developed by IBM Corp, Siemens AG and Toshiba Corp being fabricated at the IBM Deutschland GmbH Sindelfingen plant have fallen to zero – and the German subsidiary desperately needs to find new work for the plant now the new chip will probably be manufactured only in the US. Hans-Olaf Henkel, chairman of IBM’s management team, talked to the Frankfurter Allgemeine Zeitung only of a theoretical chance of the chip being made in Germany and is resigned to it not happening. He said it has been made top priority to find, within the next few months, an alternative use for the production facilities of what is now a legally separate subsidiary of IBM Manufacturing Germany. The Sindelfingen plant has 900 staff producing 4M-bit chips. The chairman is not deluding himself: Without contracts from outside we will barely make it. Although the chip, previously produced solely for IBM’s use, is now sold on the merchant market, Henkel is looking for a partner to take a financial stake in the plant. High overstaffing
Unsuccessful talks have been held with various companies from Europe, Asia and America over the last 18 months. IBM has also been cutting costs at the plant, including the reduction of employee benefits like shift premiums, and will cut staff by 1,100 to 5,300: it expects the resultant savings to be $5.9m annually. IBM Germany has a disproportionately high share of IBM worldwide’s over-staffing – but there is a new mood of realism at IBM Germany that reflects the change of attitude of the vast majority of the UK workforce over the past 10 years, although it is not clear that in Germany, it extends beyond a few companies like IBM. IBM’s German employees, says Henkel, are willing to co-operate with changes in the company to a previously unthinkable degree. Henkel attributes the new thinking to the restructuring of the company. The previous IBM Deutschland GmbH was split into several companies under the umbrella of a holding company on January 1. Henkel says it is an absolute joy to see how the new companies’ freedom is used. Many cost-saving suggestions now come from below, rather than above, as previously. The new businesses are each charged the calculated cost of renting their offices, and have discovered that their offices are too large and too expensive. The result? We are dramatically reducing our office requirements, and that’s over and above the staff reductions. It is no longer assumed that IBM will run its own payroll. Many subsidiaries would rather have payroll contracted out. For the Systems & Networks division, Henkel believes too many people are still tied up on IBM’s internal data processing. The unit needs outside business, but so far has signed only FAG Kugelfischer. The new cost-awareness also shows how IBM’s education function has been subsidised. Cheaper teaching methods are now being adopted, such as weekend seminars and distance learning. The firm is lining itself up in units focussed on vertical markets. From next January there will be a further split. IBM Mittelstand will serve smaller customers, and a separate, largely-autonomous company will sell personal computers. Henkel admits there may be overlaps, but says the days when one salesman bid all IBM’s kit to the data processing manager are finally over.
