VZCZCXYZ0001
RR RUEHWEB

DE RUEHBU #0727/01 1032122
ZNR UUUUU ZZH
R 132122Z APR 07
FM AMEMBASSY BUENOS AIRES
TO RUEHC/SECSTATE WASHDC 7860
RUCPDOC/USDOC WASHINGTON DC
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RHMFIUU/HQ USSOUTHCOM MIAMI FL
RUEHAC/AMEMBASSY ASUNCION 6103
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RUEHBR/AMEMBASSY BRASILIA 5958
RUEHPE/AMEMBASSY LIMA 2029
RUEHME/AMEMBASSY MEXICO 1358
RUEHCV/AMEMBASSY CARACAS 1190
RUEHMN/AMEMBASSY MONTEVIDEO 6360
RUEHSG/AMEMBASSY SANTIAGO 0345
RUEHQT/AMEMBASSY QUITO 0907
RUEHLP/AMEMBASSY LA PAZ APR SAO PAULO 3246
RUEHRI/AMCONSUL RIO DE JANEIRO 2190

UNCLAS BUENOS AIRES 000727 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
USDOC FOR 4322/ITA/MAC/OLAC/PEACHER 
STATE FOR WHA/BSC AND WHA/EPSC 
E FOR THOMAS PIERCE 
EB/CBA FOR FMERMOUD, DENNIS WINSTEAD 
EB/IFD/OIA FOR WSCHOLZ, MTRACTON 
EB/IFD/OMA FOR AHAVILAND AND ASIROTIC 
PASS NSC FOR JOSE CARDENAS 
PASS FED BOARD OF GOVERNORS FOR PATRICE ROBITAILLE 
PASS USTR FOR EEISSENSTAT, SCRONIN 
TREASURY FOR RALBANO AND LTRAN 
US SOUTHCOM FOR POLAD 
 
E.O. 12958: N/A 
TAGS: ECON EINV ECPS BEXP AR
SUBJECT: AMBASSADOR WAYNE HOSTS ROUNDTABLE FOR IBM CEO, AND VISITS 
TURNER BROADCASTING 
 
¶1. (U) Contains business-sensitive information.  Not for internet 
distribution 
 
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Summary 
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¶2. (SBU) Ambassador hosted a roundtable discussion on April 3 for 
IBM CEO Sam Palmisano who traveled to Argentina to visit the 
company's rapidly growing subsidiary, which is expanding at a rate 
of 15 percent per year and is now the largest U.S. employer in 
Argentina, providing products and services to 15 countries in Latin 
America, Europe and Asia.  The local Presidents of General Motors, 
Motorola and Wal-Mart participated and provided an upbeat assessment 
of Argentina's short and medium term prospects and their own 
expansion plans.  IBM, like most IT firms, said their biggest 
challenge is finding enough technical personnel to keep pace with 
their expansion plans.  In a recent roundtable hosted by Ambassador 
Wayne for the IT sector, he offered to work with the companies to 
establish a dialogue with the GOA to fortify its ability to keep 
pace with rising demand for technical personnel.  End Summary. 
 
¶3. (SBU) On April 3, Ambassador Tony Wayne hosted a roundtable with 
the Presidents of the Argentine subsidiaries of General Motors, 
Wal-Mart and Motorola for the CEO of IBM who made a one-day visit to 
Buenos Aires to visit the company's growing local subsidiary and 
meet with key IBM clients in South America.  IBM CEO Sam Palmisano 
was accompanied by Juan Fernandez Oliva, President of IBM Latin 
America, Gonzalo Escajadillo, President of IBM Argentina/IBM Spanish 
South America, and Sebastian Mocorrea, Vice President of Government 
Affairs for IBM Latin America.  The purpose of the roundtable was to 
give Mr. Palmisano a better idea of the business climate as IBM 
continues to expand its Argentine base of operations. 
 
¶4. (SBU) IBM currently has approximately 6,000 employees in 
Argentina and is the largest single U.S. employer in Argentina.  The 
firm continues to increase its workforce by approximately 10-15 
percent per year as it expands its production of software and 
services, which are sold locally and exported to 15 countries in 
Latin America, Europe and Asia.  IBM's operations in Argentina are 
growing on average of 15 percent per year and medium-term 
expectations are favorable.  IBM has been operating in Argentina 
since 1923 and has evolved over the years from an equipment 
manufacturer to a service provider.  Argentina is one of IBM's key 
global locations for expansion due to its talented pool of creative 
technicians and engineers. 
 
¶5. (SBU) Like other U.S. technology companies, the biggest issue 
facing IBM is being able to continue to locate new employees that 
have the education and experience necessary to join the company's 
expanding team.  IBM Argentina invests a lot of resources to train 
new recruits every year as the number of firms demanding employees 
places greater strains on the current rate at which the educational 
system can produce them. 
 
¶6. (SBU) While the Presidents of the companies that participated 
expressed concerns about some of the policies being pursued by the 
GOA, especially with respect to consumer price controls, all agreed 
that the short and medium-term prospects for Argentina remain very 
positive and indicated that their companies were expanding 
operations in the country and exports from Argentina. 
Wal-Mart, the newest player in Argentina, said that it was 
 
 
 
 
 
undertaking an aggressive expansion plan valued at USD 150 million 
during the next two years aimed at making the company a bigger 
player in Argentina's lucrative retail and consumer market.  Mr. 
Palmisano echoed those sentiments by commenting that things really 
appeared to have improved since his last visit to Argentina a couple 
years ago. 
 
7 (SBU) Argentina continues to grow and attract new companies, 
especially in the information technology sectors.  Most firms cite 
the countries strong educational system and the creativity of its 
workforce as key attractions when deciding to expand here.  Just in 
the last week the President of Turner Broadcasting Systems Latin 
America, Juan Carlos Urdaneta, hosted Ambassador Wayne for a tour of 
the company's new regional headquarters in Argentina, which will 
serve as TBS' new hub for regional programming and broadcasting. 
TBS is in the process of finalizing the $220 million acquisition of 
Claxxon, an Argentine content producer, that will increase its 
employment in Argentina from 200 to 600 by the end of 2007, expand 
Turner's regional channels and move it further into local content 
production.  Also this week, Google CEO Eric Schmidt traveled to 
Argentina to inaugurate the company's new regional headquarters for 
Latin America and Spain.  He commented that the quality of human 
resources for the IT sector in Argentina was as good as anywhere in 
Europe and said that Google hoped to continue to expand here faster 
than the national average for the IT sector in the coming years. 
 
8 (SBU).  Comment:  Despite concerns expressed by business people 
about the GOA's unorthodox methods of managing the economy with 
measures like price accords, Argentine and U.S. companies continue 
to express confidence in the country's short and medium term growth 
prospects.  While U.S. investors in some sectors of the economy, 
such as electricity and gas, have experienced difficulties in 
managing their operations due to interventionist government 
policies, other sectors, such as IT, have managed to expand both 
local and regional operations without any significant problems.  The 
concern most often expressed by the IT sector is the challenge they 
experience in locating adequate numbers of  ready-to-hire technical 
employees, which requires the companies to devote more time and 
resources to human resource development, which at present is offset 
by the relatively lower compensation structure.  Ambassador Wayne, 
during a recent roundtable with IT companies, offered to assist them 
to establish a dialogue with the GOA to explore ways in which 
Argentina can better meet the educational needs for the rapidly 
expanding IT sector.  End comment. 
 
WAYNE