Intel Still Not Opening Fab 42 In Chandler

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According to azcentral.com “Intel says factory to stay shut for now

Intel has confirmed it is leaving vacant a massive new multibillion-dollar computer-chip factory in Chandler that President Barack Obama once touted as a symbol of the future of U.S. manufacturing.

No employees are working in the facility, known as Fab 42, which was completed late last year and was to bring 1,000 jobs and a $5.2 billion company investment.

Don’t worry, the Intel Spokesperson puts a positive spin on the news.

“It doesn’t matter which building they work in; we’ve already increased the workforce by more than 1,000 people at that work site,” Mulloy said.

There’s an interesting note from PC Mag “Intel Scraps Plans to Open Cutting-Edge Arizona Chip Plant

The chip giant received $3.3 million in state tax credits from Arizona for creating about 1,000 new permanent jobs with Fab 42, the Arizona Republic noted in a report breaking the news that the facility has been put on permanent hiatus.
Intel has in fact kept its end of that deal, adding more than 1,000 new workers to its payroll in the state—they just work at other Intel manufacturing facilities in the area, according to Mulloy.
Intel is painting its decision not to open Fab 42 as a simple matter of finding a more efficient means of getting to 14nm production at existing facilities. But it’s hard not to see the impact of a slumping PC market on this development—Gartner recently characterized the double-digit drop in PC shipments in 2013 as the “worst decline in PC market history.”

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Intel Announces Layoffs And A Plant Closure

Yesterday Intel announced that it’s closing the Massachusetts fab 17 affecting 700 employees, according to the Boston post “Intel will close Mass. plant, cut 700 jobs“. Today Intel announced that it’s “redeploying” 400 people at it’s Rio Rancho Fab11x plant according to the Albuquerque Journal “Intel cutting 400 positions from Rio Rancho plant“.

“Due to a shifting market, we are making some difficult business decisions. Specifically, in New Mexico, we have notified employees of a phased process of redeploying up to 400 positions,” company spokeswoman Natasha Martell Jackson said in an email.

The company said it is offering Rio Rancho employees jobs at other Intel locations, buyouts and severance packages to achieve the workforce reduction. Once it becomes clearer how many are willing to take the various offers, the company said it will be able to offer more detail on the reduction.

In March of 2009 Intel had layoffs and I wrote “Planning For Loosing My Job And Extended Unemployment” when the Rio Rancho site laid off 200 people.

I survived that layoff and wrote “Intel’s New Mexico Site Layoffs, One Week Later“. I don’t know if I will survive this one.

A few more articles from The Albquerque Journal “Intel plant in Rio Rancho cutting 400 jobs” and “City reacts to Intel’s job cut announcement“.

What's Going On At The Arizona Intel Site?

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The Oregonian speculates “Intel activity slows in Arizona amid slack demand“.

The company has slowed the installation of production tools at its nearly complete, $5 billion Fab 42 near Phoenix (a fab is the industry’s term for a chip factory), according to Intel suppliers and contractors in Oregon.

These personnel, who asked not to be identified because of their relationship with Intel, say some tools appear to be idle in Arizona. Other tools have been redirected to the new D1X research fab in Hillsboro, which opens its first, $3 billion phase late this year.

When Intel announced plans to build Fab 42 two years ago, it said the Arizona facility would be complete in 2013. That’s still the timeline, according to corporate spokesman Chuck Mulloy — but he wouldn’t say when the facility will begin making high volumes of chips.

Bomb Threat At The Intel Arizona Site

From azcentral.com, “Chandler police: Bomb threat made at Chandler Intel campus

Authorities are investigating a call received on Monday morning of a bomb threat at a building that is under construction at the Intel Corporation’s Ocotillo campus in Chandler.

The building was evacuated after the call was received at about 5:30 a.m. and that police and authorities at Intel are in the process of searching the building, Chandler police spokesman Seth Tyler said. The rest of the facility is still running, police said.

Tyler said authorities searching near the building “haven’t found anything” and that Intel has “been doing a lot of the search on their own.”

Update: Chandler police: No bomb found on Chandler Intel campus:

Authorities found no explosives after a bomb threat on Monday morning at a building under construction at the Intel Corporation’s Ocotillo Campus in Chandler.

The building was evacuated after a call was received at about 5:30 a.m. Police and authorities at Intel finished searching the building using bomb-sniffing canine units at about 2:30 p.m., Chandler police spokesman Seth Tyler said. The rest of the facility is still running, police said.

Tyler said authorities searching near the building did not find anything and that Intel had done a lot of the search on their own.

Construction workers working on the building were sent home around 10 a.m.

Obama Visted Intel In Chandler, Az

U.S. President Obama Speaks at Intel's Fab 42

President Barack Obama to Arizona speaking at Intel’s Fab 42, a state of that art chip manufacturing plant under construction in Chandler, AZ on January 25, 2012. from Intel Photos on Flickr

AZCentral.com has three articles about President Obama visit to the Intel site in Chandler on Thursday.

Obama or Intel haven’t made any friends with the construction workers according to the article “Obama’s visit tests readiness at Intel“.

One necessary requirement for hosting the president was shutting down construction for a day on the Fab 42 site, which didn’t sit well with all of the project’s roughly 3,000 active workers.

Some complained that they would not be paid for the unscheduled day off.

Jones said the one-day hiatus would be handled the same as if a thunderstorm had rolled into town Wednesday. A make-up day will be scheduled, and crews will be paid to work that day, instead, Jones said.

Apparently the 6000 people that came to see Obama’s speech had to stand for hours and many got sick doing so according to the article “Thousands wait for hours to see Obama“.

He would not be the only one on whom the day took a toll. Some left in wheelchairs, some walked out on their own, but clearly even a perfect January day can be a bit overwhelming after standing in the sun for hours on end.

There was the expected political nonsense from people who didn’t vote for Obama in the article “Leaders: Obama had no role in Intel project“.

Weninger said he sees the president’s visit as a political move by Obama to take credit for the Intel project. “I respect the president and am happy he is coming to Chandler and highlighting Intel and our great business community,” he posted on his political Facebook page. “I’m just saying it’s not true if he insinuates that his policies led to this expansion. It didn’t. When you couple his press release with the visit a day after the State of the Union, it’s hard to come to a different conclusion.”

Intel's D1X In The Oregonian

The Oregonian has an article titled “Intel goes big to get small — an early look at its new Hillsboro research factory, D1X” which looks at the construction and impact of Intel’s new factory in Oregon. Even in Oregon Intel is a big employer.

“If you’re talking even a thousand jobs on one project, that will have a substantial impact on overall construction employment in the Portland area,” said David Cooke, an economist with the Oregon Employment Department. “The construction jobs are very important to the overall economic picture over the short term.”

Those workers will haul away up to a million yards of dirt as Intel excavates for D1X’s foundation and brings the site level with D1D, the fab next door.

Of that, 150,000 cubic yards are headed just up the road, to SolarWorld’s Hillsboro property. That company is contemplating a second factory someday and needs to elevate its property to ensure proper drainage.

The castoffs will raise 4 1/2 acres of SolarWorld’s site by 21 feet.

Intel Looses A Friend In The Sandoval County Tax Department

The Albuquerque Journal reports that the Sandoval County Manager has been fired over an Intel Tax Dispute.

Sandoval County Manager Juan Vigil was fired Friday following a property tax dispute with computer giant Intel.
As a result of resolving that dispute, the household-name international company that opened its Rio Rancho plant more than 30 years ago will have to pay property taxes for the first time this year.
County Commission Chairman Darryl Madalena hand-delivered a one-page letter to Vigil on Friday that told him to vacate his office and return all county property by 4 p.m. Monday.
Vigil did not respond to a phone message asking for comment.
Earlier this week, Vigil provided documents, which he said were unofficial, that showed the county assessed Intel’s Rio Rancho plant property at $38.2 million, with a taxable value of $12.7 million.
Jami Grindatto, Intel’s director of corporate affairs for the Southwestern U.S. said this week the company was happy to go on the county tax rolls and the county assessor is determining how much tax the company will owe.
In an interview on Friday, Madalena said the reason for firing Vigil was that the county needed to “move in a different, more positive direction.”

Update 04/19/2011: I was confused by this article on the first read. I thought they fired the County Manager becasue he didn’t want to tax Intel. It appears that the now fired county manager had completed the paperwork to proceed with taxing Intel, thus he was fired. So the new direction the commission wants to move in is the old direction, where Intel doesn’t get taxed. This firing has apparently caused a big problem for the commission to continue working.

“Move in a different, more positive direction” means corporations need to pay more taxes. This is at a time when there are rumors that Intel is looking to expand the Rio Rancho site after they announced a new Fab in Arizona and no doubt the tax situation has something to do with that (note: as an Intel employee, I only know the same rumors that are reported in the news papers). It’s also important to remember that states compete with each other and another state will be happy to make Intel a better deal.

The article goes on about how Intel has spent millions to build things like Rio Rancho High School. The article doesn’t mention that the city of Rio Rancho was an overgrown truck stop before Intel decided to employ thousands of the most highly paid positions (not including government) in the state of New Mexico. Meanwhile the Village of Corrales is trying to stop any attempt at Intel expanding because they think Intel is killing them with pollution.

Someone will email me in a panic that Intel will shut down the Rio Rancho site because of this news. I think Intel is far from making this happen. But this is not something that will encourage Intel to expand the site or make further upgrades making the long term future of the site questionable. Refer to why Tesla didn’t build a factory in Albuquerque, because California made them a better deal.