Di Leo points to the huge investments IBM made in the facility, which has dozens of buildings, its own power plant and a chemical-handling infrastructure so massive that it resembles an oil refinery. His real hope, though, lies in a plan to turn the IBM complex into an industrial park. Now he’s getting more involved in the community, joining clubs and trying to generate a new clientele. “It was a ghost town around here,” he says.īut business soon stabilized, Di Leo says, at about 40% below its peak. Employment at the plant plunged from 9,200 to 5,200. Di Leo, owner of Zimario’s, an Italian restaurant across the street from IBM’s sprawling computer-chip complex in East Fishkill, says business dropped off 70% this spring when the biggest of the IBM cutbacks took place. In part because of the natural beauty of the area, in part because of its proximity to New York, many locals remain convinced that an economic rebound is inevitable, if not imminent.Ĭhristopher C. It is certainly difficult to imagine that the computer giant’s declining fortunes could turn the residential neighborhoods of Dutchess, Orange and Ulster counties into anything resembling ghettos. Roosevelt’s Hyde Park home and the other magnificent estates that line the east side of the river-or perhaps for the spectacular West Point academy on the opposite bank-it was IBM, either directly or indirectly, that provided a third of the jobs in the region. While visitors might know the Hudson Valley for Franklin D. Similar growth took place to the north, in Kingston, and to the south, in East Fishkill, as IBM expanded at a breakneck pace through the 1960s and 1970s and the first half of the 1980s. Shopping malls and subdivisions replaced the dairy farms all along Route 9, draining commerce from downtown but providing classic suburban prosperity for thousands of families. The IBM factory, just south of downtown Poughkeepsie on Route 9 (the centuries-old post road connecting New York City and Albany), eventually became the home of IBM’s most important product, the mainframe computer. In part, though, it was the area’s skilled manufacturing work force and solid infrastructure that drew IBM in 1941, initially to make munitions for the military. When it became uneconomical to build ships or sew pocketbooks in Newburgh-so much cheaper in South Korea-its core essentially disintegrated, turning into a mean and drug-ridden ghetto.īoth towns suffered from changing transportation patterns that rendered their ports superfluous, along with the post-World War II flight of a broad range of manufacturing businesses from the Rust Belt to the Sun Belt. On Broadway, the wide main drag that tumbles gently toward the river, many of the old buildings are abandoned. In Newburgh, an old shipbuilding port and garment manufacturing center about 15 miles to the south, the decline is even more startling. The waterfront, victimized by ill-conceived urban renewal projects in the 1960s, is all but abandoned. Downtown Poughkeepsie, on a bluff overlooking the half-mile-wide Hudson, is shabby and crime-ridden, its once-elegant merchant buildings housing a motley collection of low-end stores and food vendors. One need not travel far in this region to find stark examples of how difficult such economic transitions can be. Unemployment in Dutchess County, just 2.9% in 1990, stood at 9.4% in July. After reaching a peak of 30,700 in 1985, the local IBM head count is down to 13,800. IBM’s three massive Hudson Valley facilities, home to old-line mainframe computer and component operations, have been especially hard-hit. Deteriorating finances culminated in a stunning $8.9-billion loss for the second quarter of this year.Ī payroll that topped 400,000 worldwide in 1986 has been cut to 250,000 through early retirement programs and layoffs, with an additional 35,000 jobs to go by the end of next year. After dominating the computer industry for decades and establishing itself as a model corporate citizen, IBM proved too big and bureaucratic to cope with the revolution wrought by the personal computer and other new technologies in the 1980s. “The rebuilding is going to be a lot slower than the precipitous reductions.” Saland, the state senator who represents the region. “There’s no magic bullet out there,” says Stephen M.
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