Technology giant spurred Northwest Austin development

Technology giant spurred Northwest Austin development

Written by Christi Snow Wednesday, 07 February 2007

When IBM first moved to Austin in 1967, locals considered its location on Burnet Road in the northwestern outskirts of the city a rural countryside. Former employee Malcolm Richburg remembers snakes and scorpions literally appearing on their building’s doorstep.

With an 500 initial employees, the company planned to hire another 1,500, who would build a then state-of-the-art IBM Selectric typewriter.

However, they surpassed original intentions, at one time employing more than 7,500 people.

Today the Selectric is long ago abandoned, and the plant has transitioned into a research and development center with 6,200 employees. After 40 years in Central Texas, retail and homes surround the site. It is one of only eight company international research labs, responsible for products like the chips used in the XBox 360, Nintendo Wii and PlayStation 3.

“IBM brought some of the greatest minds of the world to Austin, people who are staggeringly brilliant,” said Drew Scheberle of the Greater Austin Chamber of Commerce. “Not only do they bring direct employment, not only projects that affect the world, not only do they continue to further the international market, they are a magnet for talent.”

With that talent comes money, noted Scheberle, who is senior vice president of workforce and education development. IBM’s local payroll is over $600 million, which means employees pay an estimated $40 million in local sales and property taxes, while the company pays $10.3 million itself.

Workforce Evolution

Like the technology industry’s evolution, IBM Austin and its workforce has changed and matured. Richburg started with the company as an assembly line worker a few months after it opened. He received promotions and became involved with management, not retiring until 1997.

“It was nothing like I ever experienced,” he said. “I had worked in construction and in a grocery store. For me, it was almost like the Wizard of Oz.”

Leroy J. Wormley, Jr. was there on the very first day IBM opened in July 1967. A native Austinite, he left his former job as a waiter, went to the Hancock Shopping Center and applied to work the assembly line.

Along with the other people hired, he traveled to the corporation’s major plant in Lexington, Ky. for training.

When the first group returned, Building One still was not finished so they began operating in an old farmhouse situated where the new Neiman Marcus store will open this spring.

Impact on Northwest Austin

During the next few years, he saw Northwest Austin mushroom with homes as the company drew employees from around the world.

“They have brought the infrastructure, the water, the gas, the food,” he said. “It had a ripple effect on the city.”

Eventually the company would educate and promote him to become Corporate Community Relations Manager, a position he held until retirement in 2002. He still attributes IBM with opening opportunities for him individually, along with the city’s eventual technology boom in the 1990s.

“IBM brought high-tech,” Wormley said. “Austin became a Mecca for that kind of skill.”

Scheberle has also worked closely with IBM because of their support for local education initiatives and seen its affect on the community.

“Like most industries, the tech industry clusters itself,” he said. “Because of IBM, people know they can come here and maybe steal some of their employees or absorb into them.”

“Austin sold itself,” former IBM Vice President Gordon M. Moodie said in 1966, according to an archived Austin-American Statesman article. “It offers a fine living and working environment, outstanding educational advantages and impressive recreational and cultural features.”

Through the decades, the company focused on building products. However, when the dot.com crash began to impact the local economy in the late 1990s, IBM Austin moved their efforts to an emphasis in designing.

Today, the staff provides only two percent of the international manufacturing workforce and three percent of IBM’s worldwide population, but represent 10 percent of the corporation’s technical leadership. IBM also remains the third largest private employer in the Austin area after Seton and Dell Inc.

In January, IBM announced for 2006 they had received more patents than any other company in the U.S. for the 14th consecutive year, and the Austin plant contributed the largest percentage to that final tally.

“We’re so global,” Sandy Dochen, IBM Austin Corporate Community Relations Manager, said. “To be so stable here is a testament to the site and to Austin.”

IBM Austin : Then and Now

• 1967
  • Employees: 500
  • Plant Size: 200,000 sq. ft.
  • Purpose: Manufacturing
  • Hot Product: Selectric Typewriter
• 2007
  • Employees: 6,200
  • Plant Size: 1.1 million sq. ft.
  • Purpose: Research & Development
  • Hot Product: Playstation cell processor

Leaders of invention

• IBM Austin provides only three percent of the corporation’s worldwide population, they represent 10 percent of the corporation’s technical leadership.
• In 2006, for the 14th consecutive year, IBM received the most U.S. patents and Austin contributed more to that final tally than any other IBM location. Three of the corporation’s top inventors work in Austin.

Selectric Typewriter, 1961

• Revolutionized typing with a rotating ball of letters that could be changed for different fonts and a technology that kept letters from being pressed twice in a row.

Playstation 3 cell processor, 2005

• Acting as the brain of the computer chip, this cell processor allows the Playstation to handle many different computing tasks simultaneously.

Source: IBM

Green Power

• IBM is dedicated to protecting the environment. Not only is IBM the tenth largest purchaser of renewable energy in the U.S., Forbes.com listed Building 101 on IBM’s Austin campus as one of the world’s greenest office buildings in 2006.
• Strategically located near public transportation as a part of the city’s Smart Growth development zone, the building uses wind energy, while the parking garage depends on solar energy.
• The office’s white Energy Star roof reflects sunlight, reducing heat otherwise absorbed into the building.
• A four-acre pond and landscaping surround the 200,000 sq. ft. space, which is also certified by Leadership in Energy and Environmental Design, a recognition of IBM’s use of alternative energy.