June 26, 2008

HP Might Move Colo. Workers

By Andrew Webb Journal Staff Writer

The planned opening of a Hewlett-Packard call center in Rio Rancho may come at a cost to 800 employees in Colorado Springs, highlighting the often ephemeral nature of incentive-driven business recruitment.

But the state's top economic development official says local incentives are designed to keep companies here.

The computer giant and state officials last week announced plans for the technical support center, which is slated to employ 1,300 employees by 2012.

Company executive vice president Jon Flaxman said then that the company would rely heavily on the local work force to fill the jobs.

But the Colorado Springs Gazette, citing employees of a Hewlett- Packard customer service center there, reported this week that its 800 workers have been told they will lose their jobs if they don't move to Rio Rancho. Those employees who agree to the move have been offered from $5,800 to $11,000 in relocation expenses, while those who decline and are laid off will receive severance packages, according to the paper.

Hewlett-Packard, which at one time employed more than 2,500 in Colorado Springs, now has 1,800 workers there, including those at the support center.

According to additional published reports, Hewlett-Packard told workers there that the Colorado Springs technical support center is scheduled to close in the second half of 2009 -- the same time the Rio Rancho center is expected to open.

Hewlett-Packard spokesman Dave Berman said there had been "internal discussions with employees," but he declined to comment further.

Berman told the Journal on Wednesday the company had no comment.

Colorado Springs was among half a dozen cities competing for the technical support center. The California-based firm ultimately decided on Rio Rancho and Conway, Ark, which will get a similar facility.

The company said it considered quality of life, education systems, business climates and local incentives when considering the locations. New Mexico pitched a $28 million to $40 million incentive package of training reimbursements, high wage tax breaks and capital outlay for infrastructure to the company. Arkansas offered a similar package.

"These are long-term incentives," New Mexico Economic Development Cabinet Secretary Fred Mondragn said through a spokeswoman. "They've been set up that way as a means to help keep businesses here."

Furthermore, he said, the $12 million in proposed capital outlay to help HP offset infrastructure costs come with requirements that the company not pull up stakes any time soon.

"There are terms within the contract that say if they don't meet the specified number of years and live up to the terms of the contract that they have to pay the state back," he said, adding the company spent months talking to local officials.

(c) 2008 Albuquerque Journal. Provided by ProQuest Information and Learning. All rights Reserved.