Intel: Will They Build It?

If they build it, will workers come?

Listen to the interview I did on January 27, 2022, just days after the Intel announcement was made by Mike DeWine, Jon Husted, and JobsOhio. Unfortunately, I (again) predicted what has come to pass. I’m not a genius; rather, it was obvious to anyone willing to look at the deal with clear eyes. Intel was/is a company in crisis that has bled market share and cash for years, so these new moves in Arizona and Ohio represented Hail Marys more than anything.

Just over two years later, despite shelling out over $2 billion in subsidies from Ohioans, as well as tens of billions in federal money, Intel has pushed back the Ohio plans by at least a year, if not two years. Last week, Intel announced its operating loss in 2023 at $7 billion was WORSE THAN its $5.2 billion operating loss in 2022. Intel’s entire Hail Mary is dependent upon other companies hiring Intel to manufacture their semiconductors, which increasingly looks doubtful. Hence, the Intel Ohio plant may not ever truly get off the ground.

As the Wall Street Journal notes, Intel now wants even more government money to fulfill its plans. This behavior is EXACTLY what happens when government gets in the business of picking winners and losers. Companies stop putting their hands up and asking government to leave them be and start putting their hands out and begging government for money. That dependency is never a recipe for success in the long term.

One final point on Intel. Lots of companies in the semiconductor industry are building fabrication plants all over America. All of these plants are massive structures with plans to hire tens of thousands of workers. Given that Ohio has LOST nearly 40,000 residents in the last few years and Ohio’s private sector has been systemically substandard for decades, how likely is it that Intel will be able to find workers in Ohio capable of the high-tech work its needs to be done? If given the chance to work at a fabrication plant in Texas, Arizona, Colorado, Florida, South Carolina, or Idaho, will Ohio be able to lure workers to stay here or come here? I’m not sure that is a good bet worth making given Ohio’s track record over the last thirty years. Lower cost of living without other key policies (no state income tax, right-to-work, a world-class airport, etc.) will only get you so far.