返回信息流IBM Goes Global
Paul Maidment, 10.12.06, 7:18 PM ET
A job reassignment notice from IBM today signals something more than that another American executive is moving his office halfway round the world.
John Paterson, the company's chief procurement officer, is relocating from Somers, N.Y., to Shenzhen in southern China. IBM's (nyse: IBM - news - people ) global procurement division is going with him. It is the first time, the company says, that it has moved a corporatewide headquarters division outside the U.S.
Shenzhen sits just north of Hong Kong on the southeastern side of the Pearl River delta. The company already has its main buying office there, along with most of its 1,850 procurement staff in the region.
IBM has nearly 3,000 suppliers in Asia, who account for about a third of the $40 billion it spends each year on procurement. So it makes sense for the man responsible for IBM's global procurement to hang his hat there.
But the relocation confirms more than the Pearl River delta's emerging status as the supply-chain capital of the world. Shenzhen has been trying to move up the technological ladder and has been shoving the city's lower-tech component suppliers upriver by the simple expedient of raising wages in the city.
IBM, too, has decreasing need of components suppliers. It sold its PC business to China's Lenovo and its hard-drive business to Japan's Hitachi (nyse: HIT - news - people ). But as IBM and companies like it move from being hardware manufacturers to software and services sellers, they need a new set of suppliers--and clearly they see China and the rest of Asia as the low-cost source.
Last month, IBM, the world's second-largest software company after Microsoft (nasdaq: MSFT - news - people ), said it would be opening a development center in Calcutta to add to its existing Indian operations in Bangalore.
The company has 43,000 staff in India and will now be growing its workforce in China as it reduces it in the U.S., though it says none of its U.S. procurement staff will lose their jobs following Paterson's move.
That shifting global pattern of employment is old news, but that the top-boss job in a key division is relocating marks a milestone along the road of IBM's transition from an American multinational to a global company, one that can run itself from wherever it makes the most business sense.
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[Forbes News] IBM Goes Global
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