Feeds

Adieu California – Intel CEO

Barrett slams the Golden State

  • alert
  • submit to reddit

High performance access to file storage

Continuing a remarkably frank series of speeches, Intel's leadership now doubts that continued investment by the company in California plant is viable.

"We're investing outside California," said CEO Craig Barrett. Asked if he could justify further expenditure on manufacturing facilities in the Golden State, at an industry symposium, Barrett shook his head and left the stage.

Barrett later qualified the comment, Reuters reports, to suggest that unless there was "dramatic change", and high business taxes were repealed, the investment wasn't worth it.

Such change isn't likely. California has a funding crisis, exacerbated by a cap on property taxes introduced in 1978. The measure, Proposition 13, halved property tax overnight and limited annual property tax hikes to two per cent. When billionaire investor and Schwarzenegger advisor Warren Buffet described it as making "no sense" - he said he pays $14,401 on his $500,000 Omaha house, but only $2,204 on his $4,000,000 California house - the Gropinator's PR minders said that Buffet was speaking only for himself.

With California's population growing by fifty per cent since 1978, someone has to pay. And while Intel, which earned $2,275,000,000 in pre-tax profits in the last quarter, can afford it, the burden has been increasingly born by regressive measures such as tiers of income tax and sales taxes.

Bad education

But there is more to Barrett's case than a plea for corporate welfare. Both Grove and Barrett have cited systemic deficiencies in the US system (concerns shared in Europe too).

A comprehensible version of Andy Grove's 9 October 'TWHRUPBS' speech is now available online here [36 kb PDF] with accompanying slides (here [152 kb PDF]), in which Grove suggested that by 2010 India would employ more software and services staff than the United States. Federal research funding in engineering had fallen 22 per cent and in the physical sciences by 30 per cent, he noted. By contrast, China's managed capitalism was paying dividends. Grove also pointed to the $4 billion lost on intellectual property litigation. He compared the $30,000,000,000 subsidies received by agribusiness to the $1 billion a year he claimed was enough to reverse the lack of competitiveness.

Today, Barrett said that he needed to build plant closest to growing markets: and while the Americas and EMEA are shrinking in market share (down from 32 to 28 per cent and 23 to 21 per cent respectively, year on year), Asia is growing.

Barrett continued Grove's theme that the US was prepared to subsidize what he called "19th century industries" but not education to help technology investment.

""Fifty percent of advanced degrees go to foreign nationals," said Barrett. "We educate these people at taxpayer expense. They should staple a green card to their diplomas and let them stay here," he said. ®

Related Stories

Intel's Grove: US software, services face meltdown
Intel CEO admits: jobs aren't coming back to US
US tech industry staff decimated in offshore stampede
US set to make massive H1-B visa cuts

Related but not very helpful early transcript

Intel's Grove blames unitease on TWHRUPBS

High performance access to file storage

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Sorry London, Europe's top tech city is Munich
New 'Atlas of ICT Activity' finds innovation isn't happening at Silicon Roundabout
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
prev story

Whitepapers

Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.