U.S. President Barack Obama visited Intel’s Ronler Acres complex in Hillsboro Feb. 18. Outside, several dozen labor rights activists held picket signs to remind Obama of his 2008 campaign pledges to renegotiate NAFTA and put a halt to NAFTA-style trade treaties like the one with Korea that President George W. Bush had negotiated. Since entering office, Obama has not renegotiated NAFTA. And he has said he will send the Korea treaty to Congress for approval.
Obama flew into the Hillsboro airport by helicopter convoy and didn’t see the protesters, because his motorcade entered the industrial campus by a different gate. But trade was on his mind. The president was visiting Ronler Acres to announce his appointment of Intel CEO Paul Otellini to a “Council on Jobs and Competitiveness,” and to deliver the message that education is what will make the U.S. more competitive in the global economy.
“If we want to make sure Intel doesn’t have to look overseas for skilled, trained workers, then we’ve got to invest in our people — in our schools, in our colleges, in our children,” Obama said. “We can’t win the future if we lose the race to educate our children. Can’t do it.”
Protesting outside, Arthur Stamoulis didn’t think much of the president’s arguments.
“There are plenty of folks with world-class educations who cannot find a job in the U.S. tech sector,” said Stamoulis, director of the Oregon Fair Trade Campaign. One of them, protesting alongside Stamoulis, was Mitch Besser, a software engineer with a masters degree and two decades of experience in the field. Besser was a software engineer at IGT in Corvallis until the company shut its doors last year on over 50 employees, moving most of the work to China. Besser and his coworkers spent their final months training their Chinese replacements.
“No one’s going to speak against better education,” Stamoulis said. “But what the country really needs is jobs, and what the president is putting out there is trade policy that makes it easier for companies to offshore jobs.”
Intel, too, has outsourced. Its workers have qualified 18 times over the years for federally-funded Trade Act benefits — retraining, relocation and extended unemployment compensation for the victims of trade-related layoffs.
But more than other U.S. tech firms, Intel has invested in manufacturing in the United States. Intel CEO Paul Otellini told the president that three-fourths of the company’s manufacturing is done in the United States. Obama praised Intel and its founder Andy Grove for that commitment. He then proposed a set of ideas for keeping companies like Intel in America.
“In a world that is more competitive than ever before, it’s our job to make sure that America is the best place on Earth to do business,” Obama said. Obama said that’s why he’s proposing “lowering the corporate tax rate,” “eliminating unnecessary regulations,” and getting the federal government’s fiscal house in order with a five-year spending freeze. “That’s a freeze that will bring our annual domestic spending to its lowest share of the economy since Eisenhower was President.”
Ironically, those proposals directly contradict what Grove, the Intel founder and CEO until 2005, suggested in a provocative essay in Business Week last July.
Grove said Asian economies succeeded in large part because of their governments were involved in the economy and targeted the growth of manufacturing. The U.S., by contrast, seems to have forgotten that manufacturing is crucial to a country’s economic future, Grove said. When American companies discovered that they could have their manufacturing and even engineering done more cheaply overseas, Grove wrote, the American job machine began sputtering. Today, 166,000 Americans are employed in manufacturing in the computer industry, fewer than in 1975, while in Asia, computer manufacturing employs 1.5 million factory workers, engineers, and managers.
To turn this around, Grove didn’t call for lower corporate taxes, gutted regulations, or cuts in federal spending. He proposed levying an extra tax on the product of offshored labor, and loaning the money raised to companies that want to scale up their American operations.
“If the result is a trade war,” Grove wrote, “treat it like other wars — fight to win. If what I’m suggesting sounds protectionist, so be it.”