When Chips are Down, Don’t Call the Bean Counter

Methinks Paul Otellini is feeling the heat — and I don’t mean the kind from his company’s chips.

The first non-engineer to run Intel, Otellini complained this week that the US government isn’t doing enough to create jobs.

“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.

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About Mike

Mike Buetow is editor-in-chief of Circuits Assembly magazine, the leading publication for electronics manufacturing, and PCD&F, the leading publication for printed circuit design and fabrication. He is also vice president and editorial director of UP Media Group, for which he oversees all editorial and production aspects. He has more than 20 years' experience in the electronics industry, including six years at IPC, an electronics trade association, at which he was a technical projects manager and communications director. He has also held editorial positions at SMT Magazine, community newspapers and in book publishing. He is a graduate of the University of Illinois. Follow Mike on Twitter: @mikebuetow

3 thoughts on “When Chips are Down, Don’t Call the Bean Counter

  1. Otellini’s comments are insulting at best… and downright treasonous at worst.

    This is the epitome of what’s wrong with (or has become of) a capitalist system… run amok. How dare him blame the government for he and his brethren’s own greed and ultimate folly. Screw him.

    I think I’d rather buy Samsung chips anyway. At least, Samsung seems to have some integrity (as far as I know).

  2. Agree with you Mike…

    Otellini has presented what only what those at the Aspen conference wanted to hear.. just enough info (facts?) to support a few simple premises.
    – list of variables is very large for business (life is getting more complex.. duh)
    – it cost less to build outside US.. ( sweeping statement .. again, duh)
    A classic politician’s speech… over simplified and not useful or enlightened

    Costs a Billion more to put up a factory in US?
    Well compared to China .. at first blush.. sure.
    But that hardly tells the entire story…of economics.. of environmental impacts.. of the role of a company in society… etc….

    For those in significant positions.. come significant responsibilities…
    (apologies to Stan Lee) ..
    as you indicated.. he is just whining.. not stepping up

    Presentations within this group .. I expect more.
    Maybe I expect too much?

    Intel… get an engineer to lead.. the better ones are accustomed to working with large sets of variables…
    and, they are more honest than politicians (generally).

  3. Pingback: Faulty Intel at Circuits Assembly blog

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