View From Lodi, CA: Microsoft And Intel—Profit Without Honor
Last week, in my column titled
“Bill Gates—Big, Rich Phony”, I chided Americans
for failing to engage in the political process.
More pro-active involvement, I
speculated, might result in greater
opportunities—especially jobs—for our children and
I was specifically critical of the
amount of time parents spend with their children at
soccer, tennis and swimming lessons.
For a country that talks
incessantly about kids and their future, few Americans
seem willing to fight for them.
In conclusion, I noted that if
concerned citizens don`t mount a vigorous defense
against American job loss, influential globalists like
Bill Gates, who favors no caps on H-1B visas, are
certain to get their way.
No sooner had I filed my column
when I read that Craig Barrett, chief executive officer
of California-based semiconductor giant
Intel told New York Times columnist (and a
fellow proponent of unlimited visas for foreign workers)
Thomas Friedman that his company can be totally
successful without ever employing another American.
Barrett added that he could hire
the best brain talent
“wherever it resides.”
The L1 visa allows a company to
transfer one of its international employees to the US,
and permits him to work for seven years before returning
The hook: an L1 visa holder is paid
a wage closer to his salary in his native country than
the going rate in the US. And, unlike the
H-1B visa, the L-1 has no cap.
Intel, Friedman pointed out, is
making its engineering investments in China, India,
Russia, and Poland and, to a lesser extent,
Malaysia and Israel. That`s a lot of job
Like Gates, Barrett lays much of
the blame for having to go offshore for professionals on
the poor K-12 public school system.
Barrett bemoans the lack of
meaningful science instruction at most typical high
schools. And he points to Intel`s multimillion-dollar
investment in trying to improve the way high school
science is taught.
But Intel`s high school programs
are just window dressing and tax write-offs.
University of California Davis
Professor University of California Davis Professor
Norm Matloff told me to “take every remark made
by Intel as insincere and self-serving.”
Barrett revealed his true agenda in
a meeting last week with journalists at Reuters News
CEO on taxes and green cards May 8, 2005]
Pushing as always for more free trade, unlimited
visas and lower corporate taxes, Barrett said
that Intel could save as much as $1 billion in taxes
over 10 years by building its next factory in a country
Barrett is also looking favorably at India, which he
called “more competitive,” to set up an assembly
and testing facility.
Building overseas, instead of upgrading an existing U.S.
facility, would be worth as much as $5 billion to the
host nation, said Barrett.
"There are many locales that you can go to that have
much lower corporate tax rates, even tax holidays for a
period of time, and capital incentives or training
incentives at a national level,"
As for visas, Barrett claims that denying educated
people who want to come to the U.S. “has to be the
dumbest thing in the world.”
this statement is still more Barrett smoke as there is a
glut of educated, talented but
unemployed American engineers.
What put me back on my soapbox this
week is that with high school and college commencement
ceremonies at hand, graduates will hear
thousands of empty words about “their future.”
But the future that awaits them is
more likely to be the one outlined by Barrett than the
flowery one that will be predicted on graduation day.
I grudgingly admit that Barrett can
manage his company in
whatever way he sees fit. That is the mandate given
to him by his directors and his investors.
But I also know that the path
chosen by Intel,
Microsoft and others who have opted for cheaper
overseas labor does not work for the common American
maneuvering translates into bleak consequences for
Barrett is, of course, protected.
With a $2.4 million salary and exercised options of
$10.7 million in 2004, he`s set.
And who knows how much greener
things will get for Barrett? Intel is off to a red-hot
start in 2005 as revenues and net income rose 17 and 25
percent to $9.5 and $2.2 billion respectively.
But I view the course that Barrett,
Gates and others of the same mind set have chosen as
profit without honor.