Welcome to the Silicon Heartland
Ohio manufacturing prowess... is that you, playa?
The capitalist executive class decided in the 1970s that nobody was more overpaid than the American worker. We sold out our manufacturing industry in exchange for a more finance-based economy in the service of the almighty share holder. Newt Gingrich and Bill Clinton came along later and drove the dagger deeper into the back of the mythical “middle class” with NAFTA.
Deindustrialization is a story that any Ohio from anywhere other than Columbus knows too well. I’m still thunderstruck anytime I hear an old-timer describe Marion, the City of Kings, as an industrial boomtown where “$1,000 bets were common on the west end.”
That’s why I’m skeptical of any politician who alludes to the return to the country’s past manufacturing might is just around the corner:
Shortly after President Business Deals told the Mahoning Valley not to sell their homes back in 2017, General Motors liquidated the Chevy Cruz factory in Lordstown and shipped those unionized jobs to Mexico.
“Lordstown Motors” landed the vacated space as a place to manufacture its ostensible game-changing electric truck. The company went to work by hiring the grandson of the governor as it went to state government with its handout for “incentives,” which it got to the tune of $20 million in tax credits.
How is that much ballyhooed project going? Well, Lordstown hit a recored low two days ago as a director dumped half her stock in the company.
I’ve seen this kind of shuck and jive my entire life, which is why I’m not doing cartwheels over the news of Intel sinking at least $20 billion into a micro chip factory in Licking County.
"Intel's announcement today is a signal to China and to the rest of the world that from now on our essential manufactured products in this country will be made in the United States of America," DeWine said during the press conference in New Albany.
Oh yes. I’m sure Chairman Xi Jinping is shaking in his boots at our backwater outpost inking a business deal with a company that hasn’t been relevant since the “Dude, You’re Getting a Dell!” era.
The factory won’t cure the chip shortage. Nor will it manufacture auto chips as DeWine falsely insisted numerous times in a bid to tie car prices to inflation.
A deal of this magnitude is usually a race to the bottom for state and local governments. Think of how Amazon had every city council in America (including our own) ready to lick boots at a moments notice. Amazon pimped them all and chose New York City in the end.
And it’s not like Republicans have any societal solutions other than letting businesses run roughshod over their workers. And make no mistake, nobody whores themselves better than our dear leaders and their buddies at the corrupt slush fund that is JobsOhio.
DeWine would love to talk about every aspect of this deal other than how much we gave Intel to bless us plebes with their technocratic presence. We do know it’s more than North Carolina could offer.
From Evan Hoopfer and Lauren Ohnesorge of the Triangle Business Journal:
Sources added that North Carolina's inability to come to terms with the building of a post-treatment facility and the multi-billion dollar ask for incentives that included tax credits for decades may have been reasons why the chipmaker decided to pass over the TIP site, formerly known as the Moncure Megasite. The project faces stiff competition from several states.
Intel wouldn’t agree to such an announcement without having such “incentives” — again, that’s business jargon for corporate welfare — written into stone. That DeWine and his minions didn’t want to talk any numbers at all let’s me know all I need to know about this deal.
And that’s before learning that Intel has a history of making big splash announcements only to fall woefully short.
From Adam Shah of theregister.com:
In 2011, then-CEO Paul Otellini announced Intel was investing $5bn to complete Fab 42 when President Barack Obama visited an Intel facility in Hillsboro, Oregon. At the time, Fab 42 was to make 14nm chips, including smartphone processors, and create 4,000 jobs.
Ultimately, the announcement turned out to be a false promise. Intel cancelled completion of Fab 42 in 2014 after manufacturing woes and blunders in markets including mobile devices. In 2016, Intel laid off 12,000 employees to prioritize its products in the data center and the Internet of Things markets.
In 2017, then-CEO Brian Krzanich repeated the pledge to complete Fab 42, this time repackaged as a fresh announcement with President Donald Trump. Intel said it would invest $7bn to complete Fab 42 to make 7nm chips.
Intel powered up Fab 42 in Arizona in late 2020 to make not 7nm but 10nm chips. That's the process node that was delayed for years due to critical fabrication missteps, causing Intel to lose its manufacturing lead over TSMC and Samsung.
This is how the beautiful sausage gets made in Ohio. And because of the “objective” nature of the press, brazen claims from people with vested interest in the project get repeated until they become manifest destiny in the minds of politically connected people on both sides of the aisle:
What makes a job “good-paying”? Because even if Intel does bring 3,000 jobs to Central Ohio, I know they won’t be unionized without the blood, sweat and tears from the lowest-rung of workers.
What happens if Intel, like General Motors before it, decides that not even the tax abatements make Ohio worth doing business in? Well, the good news for DeWine is that he will be dead when that happens, so he’ll have no need for making another campaign in Hell.
But hey, we’ll still be here. No reason to think that these two groups equally in need of good press have struck the best possible deal they could for anybody other than themselves.
THOSE WMDs. 12 media accounts of Beanie Babies hysteria, circa the 1990s… Leaked chats reveal evidence of hate crimes by U.S. fascists… “I’d keep it on the down low:” the secret life of a super-recognizer… Crypto giant Binance kept weak money-laundering checks even as it promised tougher compliance… This 22-year-old builds chips in his parents garage.
Greg LeRoy published the "Great American Jobs Scam" in 2005, and the only thing that has changed is that the situation has gotten worse. He describes the myriad problems that result from these incentive deals, notably:
- they don't create the promised jobs
- they don't generate the promised revenue
- they don't actually sway companies in their relocation decisions