IBM to close plants in Mainz, Germany and Hungary

October 22, 2002

Report from Mainz, Germany:

STD-Plant Mainz is affected by the IBM-Hitachi deal. However, we in Mainz - just like the Hungary Plant - are not being sold but being closed down. The Head-Production (Wafer and Slider) is about to cease in November this year, the Disk-Production will terminate in December 2003 at the latest, possibly earlier. Altogether a good 2000 jobs are going to be cut. This is the bitter end to what once used to be Europe's biggest Computer Manufacturing site.

Right now the Works Council is negotiating a compensation package which we think is quite comfortable, especially for the age group 50 plus. However, the best compensation plan does not substitute a job. None of our employees understands this decision, as both quality and cost of Mainz and Hungary products were good. This is obviously another result of the ever increasing shareholder-value policy within IBM, making one person (Lou
Gerstner) a billionaire and thousands of workers redundant.

Hungary: from Yahoo Business News

International Business Machines Corp. said on Tuesday it would close a hard disk drive plant in Hungary due to weak global demand, cutting 3,700 positions there.

The company, Hungary's second-biggest exporter, said the shutdown of the Szekesfehervar plant about 40 miles southwest of Budapest would mean the loss of 2,100 IBM jobs there. IBM also said 1,600 contract workers would be cut at the plant.

The Armonk, New York-based computer hardware, software and services company said that it was trimming about 700 other unrelated jobs at IBM, including less than 600 jobs in its global services division.

The 2,800 total IBM job cuts are less than 1 percent of IBM's work force, which was 320,000 at the end of 2001.

The plant shutdown is a clear sign of the economic slowdown worldwide, with IBM carrying out the biggest round of job cuts in Hungary by a foreign investor since a post-communist investment boom.