Micron says it helped stop loss of jobs Mike Maharry The Idaho Statesman / Edition Date: 02-12-2005
Lobbying efforts by Micron Technology Inc. and the Idaho congressional delegation were credited Friday with helping prevent the U.S. Export-Import Bank from subsidizing China's growing memory chip industry.
A Micron spokesman said a Chinese company's bid for an Export-Import Bank guarantee of a $769 million loan to buy chip-making equipment would have contributed to a glut in the memory chip market and led to a loss of American jobs.
"We don't think the U.S. government should be using U.S. taxpayer money to finance the movement of semiconductor jobs to China," spokesman Dave Parker said.
Micron lobbyists worked with Sen. Mike Crapo, R-Idaho, who heads a subcommittee overseeing Ex-Im's operations, and the three other members of Idaho's congressional delegation, to have the loan application denied.
Ex-Im officials would not comment on the status of the loan, but congressional and industry sources said the bank has effectively rejected the request.
Crapo spokeswoman Susan Wheeler said the senator felt the bank's decision was appropriate because there was no consensus on whether the loan guarantee was good or bad for the U.S. economy.
The loan guarantee would have allowed China's leading semiconductor maker, Semiconductor Manufacturing International Corp. (SMIC), to buy three-quarters of a billion dollars worth of chip-making equipment from Santa Clara, Calif.-based Applied Materials Inc., one of America's leading high-tech exporters. Applied Materials had argued that the loan would be consistent with the bank's mission of fostering U.S. exports and would keep Shanghai-based SMIC from turning to suppliers in Japan, South Korea or Europe.
Micron's Parker said the global semiconductor industry could already be entering a period of oversupply, which in turn will have an impact on pricing. "The U.S. government should not contribute to this oversupply situation by providing a subsidy to SMIC, at the expense of competitors in the United States, like Micron," Parker said in a statement.
Parker said a Micron factory built four years ago in Utah — originally slated to employ 3,000 people — is being used as a test facility because market conditions don't support its start-up. Micron laid off 10 percent of its work force two years ago but has subsequently added to its work force until it now stands at pre-layoff levels. Micron employs 18,000 people worldwide and 10,000 in the Treasure Valley.
SMIC already has five foundry facilities in China and plans to construct at least two more over the next two years. It is one of the fastest growing semiconductor companies in the world, according to Parker. It has received significant funding from Chinese banks and also launched an IPO in the U.S. and Hong Kong markets in March 2004, which allowed the company to raise $1.8 billion.
"This United States government-backed financing would have facilitated and promoted the migration of U.S. high technology manufacturing jobs to China," Parker said. "Our government policy should be aimed at promoting and preserving U.S. manufacturing jobs — not in encouraging the outsourcing of jobs to China."
Parker praised the efforts of Sen. Crapo, Sen. Larry Craig, D-Idaho, and the state's two Republican members of the House, C.L. "Butch" Otter and Mike Simpson. Parker said the four demanded that the Ex-Im produce evidence that the loan was justified and in the best interests of the United States.
This is a classic example of a well funded, first class lobbying and public relations operation. In this case, Applied Materials was the patsy.
Likewise, until Rambus decides to fight fire with fire outside the labs and the courtrooms, Micron will continue to hold the upper hand in shaping public policy and public opinion about all things Rambus.
Rambus would do well to redirect some of the monies it spends on stock buybacks to support its employee stock option grants and instead used the cash to make an investment on Capitol Hill. If Mr. Hughes is smart, he will open a Washington Office of Governmental Affairs and hire a couple experienced and respected Washington lobbyists to represent Rambus's interests on this front of the battleground.
A lobbying operation takes years of steady investment to produce results. The sooner it is started, the sooner it can contribute to the cause of its corporate sponsor.
And on the subject of public relations, who is the Rambus spokesperson, anyway? Fact is, Rambus has no "Dave Parker" of its own and it shows. It's time to hire a savvy press person inhouse to manage public comments.
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