Policy Matters Ohio
12/02/2024 | Press release | Distributed by Public on 12/02/2024 14:56
US contract with Intel rolls back promises made to Ohioans
US contract with Intel rolls back promises made to Ohioans
Posted December 02, 2024 in Press Releases
On November 26, The U.S. Department of Commerce released highlights of the final contract between the federal government and Intel Corporation, outlining requirements for the $7.865 billion in funds the company will get under the CHIPS and Science Act, including $1.5 billion for its New Albany facility. The community impact report outlined workforce goals, safety objectives, and environmental guardrails that provide some safeguards and transparency. However, there is a lack of public, enforceable benchmarks across the board to hold Intel accountable, and the agreement itself is not available to the public. Most important for Ohio, Intel will not make good on the promises it previously made to secure hundreds of millions of dollars in state aid.
"Intel coming to Central Ohio will impact our communities and statewide economy for generations. However, without proper safeguards, the net positive is going to be diminished," said Bailey Sandin, Work and Wages Fellow at Policy Matters Ohio. "Additionally, under the agreement, Intel is only building one Ohio semiconductor production facility in the next few years, not the two it promised would be complete by 2028 (another could be built by 2030, depending on market demand). The broken commitment means there will be 3,500 fewer jobs than originally anticipated - 2,000 construction jobs and 1,500 permanent production jobs. Intel is backtracking on the written promises it made to Ohioans two years ago and needs to be held accountable."
"This is especially problematic with the sudden departure of Intel CEO Pat Gelsinger, who spearheaded the company's Ohio investment. Governor DeWine should immediately demand negotiations with Intel to strengthen what the company will do for its workers, the environment, and the community or make clear that the state will require Intel to repay the $300 million already provided for the second plant at the earliest permitted date." Sandin said. Ohio's agreement with Intel calls for both plants, known as "fabs," to be built by end of 2028 or the state can require repayment.
The governor's office noted in response to questions from Policy Matters Ohio that, "At this time, Intel has not made any changes to its formal commitments to Ohio," and said the company's progress on meeting the metrics for the project would be evaluated based on its annual reports. "That's not good enough," said Sandin. "The governor should demand that Intel account for the change in plans announced last week."
Policy Matters Ohio has recommended that the state require Intel to annually report full- and part-time jobs created, demographics of employees hired for those jobs, wages and benefits paid, capital invested, and other key metrics, along with requiring that Ohioans account for 80% of the workforce. Policy Matters also spelled out ways to hold Intel accountable for commitments they made in exchange for state investments. While some of these measures will be reported to the state and federal aid is supposed to be paid based on Intel's completion of project milestones, neither the state nor the federal agreements contain enough safeguards given the billions of dollars in aid being provided.
Moreover, Sandin said, "With billions of taxpayer dollars being used to bring the semiconductor industry back home, Intel must adhere to guidelines, meet publicly known milestones, and fulfill their commitments to ensure public dollars are not being wasted on false promises. Gelsinger's departure reinforces the need for transparency and accountability."