.By Hilary Niles Vermontdigger.org
University of Vermont economics professor Art Woolf has tried to imagine the impact on the local economy if IBM’s Essex Junction plant were to close in a year.
Most obviously, it would mean the loss of about 4,000 high-paying jobs. A Greater Burlington Industrial Corporation analysis estimates that IBM generates $200 million to $250 million in annual payroll and injects about $1 billion a year into the state’s economy.
Woolf thinks those estimates are probably low. But the local economy already has lost that many jobs or more since IBM’s peak, he said.
“If they close down, we’d be repeating what’s happened in the last number of years, except it would happen much more quickly,” he said.
Job losses of that magnitude are easier to absorb over time, Woof acknowledged. Still, he said, the area’s financial engine is diversified and resilient enough that even such a “worst-case scenario” would not kill the economy.
And depending on the structure of any sale, the plant could stay open for a time, or possibly be scaled down.
One factor that would temper the consequences of any job losses, Woolf said, is IBM’s highly trained workforce. The expertise and capabilities of these employees are an asset for the state’s economy, he said, suggesting a plant closure could free these highly trained workers to start new businesses or enhance other companies.
“Those freed resources can be absorbed by either existing firms or new firms,” Woolf said. “If there’s somebody out there that can make use of those resources, then that’s going to moderate the downside effect. And that happens all over the country when major companies close down.”
“You’re not going to have 4,000 people selling their houses and moving. And you’re not going to have 4,000 people totally unemployed,” Woolf said.