Methinks Paul Otellini is feeling the heat — and I don’t mean the kind from his company’s chips.
“I think this group does not understand what it takes to create jobs,” Otellini complained. “The next big thing will not be invented here. Jobs will not be created here.”
True that, as long as OEMs like Intel use domestically trained engineers to move all their design to lower-cost nations not for intellectual reasons but to save a few bucks. The inconvenient facts Otellini so casually ignores are that American companies are sitting on record cash reserves, and no one would claim the US government should be in the business of forcing them to spend their treasure.
Ideologies aside, this is a tired canard. One can’t logically complain government inherently is the problem and in the next breath say that government needs to solve their problems. One can’t complain government isn’t doing enough to protect their IP and in the next breath say the laws are too onerous. That’s just whining.
In fact, even Otellini doesn’t seem to believe his own words, having at a conference last fall credited China’s rebound in part to its stimulus package. Let’s get at what Otellini really wants: A government handout. He is oh-so-proud of having garnered what were effectively tax-free plants in China, without stopping to consider that such blatant corporate welfare places the burden on the individual taxpayer. (Keep in mind, however, what you and I pay in taxes is not his problem.)
Still, based on his comments, one could picture Otellini formulating the following financial strategy:
Taxpayers give money to the government, which gives it to companies, which invest it in Asia (or just sit on it).
I’m just not sure what problem that solves.
Does Otellini really think China is a long-term answer and that its intentions are benign? Has he not considered the possibility that China and other poor Southeast Asian nations are doing anything they can to attract wealthy businesses, and that once it has the supply chain monopoly in place, those businesses will be forced to pony up? Intel is a pawn in a much bigger game, and he is betting his bank that he can cash in his chips before the house calls.
With Intel’s stock trading at a 52-week low and new research reports — coincidentally, I’m sure — projecting Samsung to overtake Intel as the world’s largest semiconductor supplier in the next three years, my guess is Otellini’s comments come from his ego and his wallet, not his head. And maybe Intel’s problems stem from having a bean counter, not an engineer, at the helm.
Aug. 30 addendum: A-ha! Intel just announced it is lowering its third-quarter forecasts. Otellini’s comments are sounding more and more like sour grapes.