Our gain, their loss

HP's move to Rio Rancho is good news for New Mexico, not so good for Colorado.

Hewlett-Packard expects that "overwhelmingly most" of the eventual 1,300 employees it plans to hire by 2012 for the Rio Rancho facility will be New Mexicans.

By Trip Jennings, Marjorie Childress 06/24/2008

RIO RANCHO -- The Colorado Springs Gazette is reporting that Hewlett-Packard Co. told the 800 employees of its customer service center there that they will lose their jobs unless they agree to move to the new facility planned for Rio Rancho.

The Gazette reported that according to "sources," HP told workers the Colorado Springs call center will close in the second half of next year, and the sources said they were told not to disclose the information outside of Hewlett-Packard. The Gazette continued:

HP spokesman Dave Berman confirmed Tuesday the company was in "internal discussions with employees," but he declined further comment. Last week, he said the New Mexico center's effect on Colorado Springs hadn't been determined because staffing details were still being considered.

Employees at the Springs call center must agree within 45 days to make the move, or they will lose their jobs when the local center closes, the sources said.

"Most of us won't be relocating because of the difficulty in selling our homes here and even if we do move out there, who is to say that we won't be laid off a week later," one of the sources said.

Employees who agree to move will be eligible for between $5,800 and $11,000 in relocation expenses. Those who refuse a transfer and are laid off will receive a severance payment based on the company's policy at the time. HP recently cut its severance payments from two weeks for every year with the company to one week for each year, sources said.

Hewlett-Packard, the world's largest PC maker, announced last week that it will open a customer service and technical support center in New Mexico that's expected to employ 1,300 people by 2012.

The center is to open in Rio Rancho in mid-2009 and initially will have several hundred workers, according to Jon Flaxman, HP's executive vice president and chief administrative officer.. The payroll ultimately could reach $50-$60 million a year.

According to Flaxman last week, HP's focus wll be to hire New Mexicans instead of bringing people from out of state to staff the Rio Rancho center. "We believe that overwhelmingly most of the employees that will be hired will be from the local area," Flaxman said in response to a question.

Flaxman also said last week that the company was assessing whether to close or reduce other plants in the U.S.

"At this stage we're evaluating all our plans to optimize our footprint in the U.S.," he said.

Dave Berman of HP declined Wednesday to discuss the Colorado Springs Gazette story.

"At this point I cannot comment further," Berman said. "This essentially is an internal discussion with our employees and it would be inappropriate for us to talk about it publicly."

Berman added, "I think what John said was that most employees" would be hired locally. When told "overwhelmingly" was the word that Flaxman used last week, Berman did not contest it.

The state is providing tax breaks and other financial incentives to lure HP to New Mexico. It was unclear whether some of those incentives were linked to a certain number of jobs.

The company could receive as much as $8 million to $10 million in state subsidies for training workers and more than $20 million in state tax credits for creating high-wage jobs, Economic Development Secretary Fred Mondragon said last week. The governor also will ask the Legislature to provide $12 million in capital improvement financing for the project. The majority of that capital outlay money will go toward constructing the building, Flaxman said last week.

HP will qualify for Job Training Incentive Program, but only for jobs that go to New Mexico residents, economic development spokesperson Toni Balzano said Wednesday.

The company also will qualify for the state's high-wage incentive tax credit. It will be applied to every job that pays $40,000 annual salary in an urban area, which could be 1,000-plus jobs of the 1,300 total HP has said it will create, Balzano said.

"There's nothing about our incentives that makes them hire 100 percent of New Mexicans," she said. "That is entirely up to HP. If they choose to move people here or to choose NM residents, that is their call."

Balzano said the state hopes that the majority of jobs at the Rio Rancho center go to New Mexicans.

"It was news to us that Colorado Springs plant was closing. We didn't have any heads up," she said. "But it's a benefit to the economy ... if they bring people in too. Either way you have people coming in to buy homes, to buy things. Either way it is good to have these 1,300 jobs."