Don't blame Obama for fabless America

10/27/2010 1:09 PM EDT

I agree with Dan. Obama is not the problem. He is looking for solutions for a problem that started long ago. What is the solution?

10/27/2010 2:37 PM EDT

Yes Intel is more patriotic that other companies, but even Intel isn't immune to US economic policy. I'm sure their recent decision to shutter their Oregon chipset fab and open up a FAB in China is not a one-time event but the start of a trend. In general it's easier for large companies to keep operations in the US; they can often extract tax concessions from local and state govenments as well as favorable tax treatment from the IRS.


This is typically not the case for small business. To stay compentitive I need to keep all my IC and board manufacturing overseas and the rest of my operations in the US to the absolute minimum. And if current trends continue I might have to move the HQ and the rest of the company overseas as well.

As for the role presidents play, FDR still has Obama beat in terms of absolutly the most destructive and moronic economic policies, but Obama's quickly gaining ground. Obama's cap and tax plan could end up being the the last nail in the coffin of American technological leadership.

10/27/2010 2:59 PM EDT

Obama has been a disaster for business. He's taken a very hostile attitude, and businesses have responded by not investing in the US. He passed the Healthcare scam that raise the cost of doing business, and will sooner or later cause tax increases to insure those who aren't currently. He's allowing a massive tax increase to occur in January.

I fall back on an old adage. You can't be pro-jobs and anti-business. However, he's been very anti-business. Now one could argue, and I would agree, that there needs to be tightening of rules in the financial sector and the housing market, but that should have been straight forward to do. It should have been little more than a minor course correction to prevent what happened 2 years ago from repeating. With the bash business rhetoric, businesses have responded accordingly, and done nothing out of fear of uncertainty. QED.

10/27/2010 3:42 PM EDT

I am reading a trend to blame Obama for every dog dying in the streets. The truth is that US is going from a very rough patch and US has seen her part of the glory. I agree with Dan that for business to prosper it should be profitable. Government can surely bend policies and give more incentive to companies to keep their business in the country but is it capitalism or socialism?

10/27/2010 4:16 PM EDT

Outsourcing jobs and keeping jobs in the nation have always be a hot political topic. However, they are an economical topic as well. The reality is if the cost of producing is high in a place, there will be no chance of keeping production in the place. Imagine how much you will have to pay if a T-shirt is manufactured in US. It is true that outsourcing will keep US corporations stay competitive. It is also true that keeping people employed will maintain the healthiness of a nation. There is a balance between them. It is the politicians' job to find the balance. Another reality is policy is just as uncertain as business is.

10/27/2010 4:45 PM EDT

Dan says, "The future is always uncertain and the whole point about investing is that it happens when it makes business sense. There has to be some long-term expectation of profitability." Exactly. And Obama's policies - possible massive new regulation and possible massive new taxation - are creating, what? UNCERTAINTY!!! about whether or not businesses will be to expect to be profitable. If you don't know if you're going to get reamed by Uncle Sam or not, you don't know if you're going to make a profit. It's not that complicated. Finally Dan, just because 2 companies are still expanding in the US doesn't mean a lot more aren't. There is a record amount of cash sitting on the sidelines right now waiting to see what will happen in 2011 and beyond.

10/27/2010 5:19 PM EDT

I don't particularly agree much with the position espoused in the article. Now, to suggest that the Obama administration were the ONLY problem would of course be incorrect, and the trends listed in the article would help make it clear that manufacturing in America has had issues long before this latest administration. However, for Mr. Hutchinson to fail to note the quite recent call by Intel's CEO for this administration to do something right in terms of US manufacturing causes me to think the author has missed some significant things (by accident or otherwise). Furthermore, to suggest that since Intel is now launching the building of a manufacturing facility is in some way a vote of confidence in the Obama administration's general business approach or its approach in terms of manufacturing in particular is, well, silly. I expect that Intel will do what it needs to do in spite of this administration. On another note, this article seems to suggest that this administration is at a loss for things it could do to improve the competitiveness of US manufacturing - and I agree. However, the author suggests that ANY administration would be likewise hampered and here I don't agree at all; there is plenty that could be done and assistance from a congenial congress (that has been available to this administration) makes this administration's ineffectiveness stand out.

10/27/2010 6:17 PM EDT

"The decision about where to invest was made on grounds of cost, best capability, and lowest risk."

Yes, business is not about nationalism or patriotism, it's about making money. And in certain instances of design & manufacturing decisions, the U.S. is and has been considered a "low-cost/high-profit" center of operations, regardless of who occupies the Congress or the White House.

Having said that, pro-business policies would certainly encourage greater investment in the U.S. than anti-business policies. Duh!

10/27/2010 9:02 PM EDT

Outsourcing and far-land manufacturing aint newly found, they've been here since 25 years. 5 years before you could see US malls full with "Made in China" products, neither 10 years before too. US was in lead of innovation, creativity, solutions however went to far on leaving low-level tasks on others shoulders in different countries. Emerging powers caught us at some points where we lead, now we are battling for currency or material sources where we are heavily depended on these low-end solution providers cause our economy is damaged and we need more money for recovery.

These main issues wont change by Obama or by someone else since Americans wont turn back to path where they were at lead for decades. Perhaps its time for another 'Mission to moon' where new breath taking technologic solutions would be revealed at US.

10/27/2010 10:41 PM EDT

FDR presided over saving the US and indeed the entire world from collapse brought by the incompatibility of traditional "gold standard" monetary system and the newly emerging economy based on global trading. Indeed, he laid foundations of the rise of the US to the industrial and military superpower. It is absurd and counterfactual to imply that his economic policies were "destructive and moronic", Glen Beck notwithstanding.


The anti-business nature of Obama policies is, I believe, another meme that the far right is pushing, and equally untrue. The hollowing of US manufacturing happened over last 15 years or more; blaming Obama for loss of GDP is like losing your wallet in the forest and looking for it under the streetlight because that's where you realized that it's gone.


GDP is about productivity. Everything that increases productivity is pro-business; therefore education and healthcare are actually pro-business in the long term---look at Germany which has actually lower unemployment than the US and beats us in exports (as someone else said, we're not competing with China---we're competing with Germany in exporting to China).


We in the US should play to our strengths: good industrial infrastructure, tradition of entrepreneurship and inventiveness, rule of law, good education system, and social harmony based on a perception of justice and fairness. It is smart and patriotic to support these pillars of our own success; that includes being willing to pay for them.


Clearly, we live in interesting times, on a cusp of change from old to new technologies. Computers, biotechnology, and clean energy are replacing the traditional technologies---and we are well-positioned to take the lead in them if we keep looking forward, beyond the petty politics and short-term self-interest.

10/28/2010 12:42 AM EDT

I think Obama should share some blame, anyway he is the one sit in that seat.

the reason I think is his lack of experience in economics.
He is a lawyer, macro economy is no kid's homework. So he handled it naively or poorly.

If you look at China, PM Wen has been around since 1980s, so he is more practical more sophisticated.

Maybe it's time for US to change it's political system. You guys need a real genius who knows everything to be in oval office, otherwise something is going to screw up.

In China/russia president take charge of political/diplomatic, PM take charge of economy, which is just easier for anyone.

In US you need a superman.

10/29/2010 4:21 PM EDT

Yes. Blame the patsy for being a patsy.

10/29/2010 4:36 PM EDT

I do not think so would be fair to put the blame on Obama. Outsourcing started long time ago, slowly and surely. Now because of recession and high unempolyment, make people to realize that all fabs are gone to Asia.

10/29/2010 5:37 PM EDT

So what should be the solution? We need to develop business opportunities will help us manufacture products competitively in the United State. In close analysis I don't think we are that far in cost if we focus on higher levels of automation. Even Foxconn is looking at expanding into the US and shipping products to China. We need to re-invent our innovation process to speed up the deployment of high value products.

10/29/2010 6:00 PM EDT

The policy that drove business to oversea and outsource everything had started with the GOP since the mid 90s. Obama is only on the seat for 2 years with the the economy mess that created by the same group of GOP senators and congressman who now cry foul about Obama's changing their policy. This same group of GOP so call "friend of businesses" voted NO on a Democrat bill to fast track business claim in capital investment. Business is for profit first and foremost. Businesses will do whatever they think that would give them the most profit. It is sham that these CEOs talking about patriotic in investing in America and how the US gov policy not in favor of investment in the US. They are worry about their bonus more than anything else. Again, small businesses account for 60-80% of new jobs; not big corporations.

10/29/2010 6:53 PM EDT

Barely three weeks have transpired since a major US tech CEO proposed that this administration initiate long-term tax breaks for new (and upgraded?) American manufacturing in particular. The proposal addresses the REAL concern that corporations have in government tax policy and can also address the REAL observation that US manufacturing capacity has been diminishing for quite some time. Failure to act on something along these lines WILL be the failure the Obama administration.

11/2/2010 5:29 PM EDT

Well, the obvious solution to the original question is isolationism and protectionism. However, last time I checked most companies enjoy a pretty significant export trade so to do that, we'd be taking a beating in the short term, both fiscally as well as politically. So it will never happen. So a way to slowly migrate in this direction is tariffs on imports (and thus, we will be tarriffed on exports). This is obviously very, very painful in the short term. Obama was hinting at some of these approaches (but subtly). But much of this flies in the face of US preached capitalism. Thus, this approach also probably dictates that we will need to "bring the boys home" from other countries that we are trying "educate."

It’s not logical to complain about shipping off jobs unless you're prepared to start instituting protectionist ideas.

11/3/2010 3:51 PM EDT

As a Canadian E.E. watching the US for the last 30 years I've seen corporate America sell out the US, little by little, in favor of corporate profits (hence executive compensation). I've also watched corporations move globally to fight to pay the least amount of taxes anywhere in the world.

It's clear corporations take advantage globally while countries pay the price nationally. How do you fix this? Locally. Global corporations will NOT help.

11/5/2010 11:03 AM EDT

CEO's answer to a Board of Directors, and the B of D answer to investors who want a quick return on investment. In order to achieve this, they will find the least expensive means of manufacturing their products. When profits are high, stock values are high. Globalization does not allow any single country or president to effectively control the laws and taxes of another country, so they have little control (beyond protectionist strategies).

If so much of the country's economy depends upon small businesses, that is where the stimulus dollars should be going. Small businesses typically cannot outsource manufacturing plants. Create an environment where small businesses can thrive and an incentive for them to keep businesses in the US as they grow.

1/20/2011 7:34 PM EST

How many people who are complaining about the slow economy will buy a product made in America instead of a cheaper version made overseas? A few, but not many. The American model has been for people to optimize their personal wealth. The standard of living is higher in the US than most other places. If folks are willing to accept lower wages, they too can have jobs. We cannot have it both ways. Buy American, or accept the consequences.