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AMD Receives $683M for Dresden Plant
Cocooner writes "Infoworld has an article explaining how AMD received $683 million in grants from Germany and the state of Saxony for its next-generation microprocessor wafer facility. The new plant will be located in Dresden, adjacent to Fab 30 and will be called Fab 36. It will be the first AMD 300mm manufacturing facility."
I have to agree. This is even more disappointing as the government is cutting social funds. Here in Berlin they are cutting the low-priced metro ticket for people with low income, investments in culture and education, etc.
The economy lobbyists have such a strong influence on politics.. that's really sad.
How much new revenues will this new plant bring into Dresden? 600 million plus seems an awful lot of money to get just 1000 additional jobs.
Unless the city going to get substantial revenues from taxes, or increased business opportunities for vendors, it seems like a huge waste of money.
more about me
This is goverment intervention of the free markets.
This is a threat to Globalism!
The period between 1950 and 1973 was by far the most successful of the century. This was an era characterised by capital controls, fixed exchange rates, strong trade unions, a large public sector and a general acceptance of government's role in demand management. The average annual growth in "per capita real GDP" throughout the world was 2.9% - precisely twice as high as the average rate in the two decades since then.
And to think of how socialists in the U.S. piss and moan when the federal government awards contracts to oil firms. Double standard, anyone? Who's to say that there's not something going on behind the scenes between AMD and Schroeder(sp)?
"Ask not what your country can do for you." --John F. Kennedy
employing 1000 highly skilled workers
Most of these jobs will likely not need to have much special skills, chip fab work is in some way just another form of assembly line work. I guess it is at most 200 of them that needs to be highly skilled.
Other than that I think your argument of an ecomony knock-off effect do hold.
they are probably figuring that the plant will make suppliers and customers of AMD move nearby
Wafer fabs usually spend a relatively small amount of money in local economies. The bulk of the cost of a new fab is allocated to new equipment, which is mostly imported from the U.S. and Japan.
Still, there are the 1000 local permanent jobs, local jobs for construction of the actual building, money spent by equipment vendors support personnel in hotels, local costs for water and power, and local taxes.
A fun anecdote regarding water consumption: I write software for wet benches. I shipped a bug once to a fab in Phoenix that caused their DI water consumption to skyocket. The fab's DI water plant hit max capacity, and the City of Chandler had problems keeping up with the plant's consumption.
Here in Boise, local philanthropist J.R. Simplot built the city a park with a dozen or so soccer fields. The real purpose behind this park - a place to distribute processed waste water from the Micron plant. Not that I have any problem with that.
If I remember correctly, the Intel 300mm fabs are just beginning to produce commercial chips (I don't remember which process they run). So, I don't think we've seen the effect of their 300mm fabs yet.
I apologize for not being able to answer your question. I live in the US, you see. I am not familiar with the concept of government incentives and payments in exchange for favors from the corporate sector. Not only that - I live in a state which will give 2+ billion US, free training to their workers, freeway expansion around their facilities, and a free cargo dock to our favorite corporate entity in exchange for 1,200 jobs. But since our state government knows best, it must be done because it has a tremendous ROI.
There are a huge number of yeast infections in this county. Probably because we're downriver from the bread factory.
A.) The destruction of Dresden proposed no military value whatsoever (aside from some who argued that lenses were being produced there used in rifle scopes - so late in the war, anyway, that this hearsay had no impact even if true)
B.) Less than 6,000 died in bombing raids in london, and most targets which the Germans set their site at were of MILITARY VALUE. More people died in Dresden than in Hiroshima and Nagasaki combined. Allied apologists for the massacre have often "twinned" Dresden with the English city of Coventry. But the 380 killed in Coventry during the entire war cannot begin to compare with over 1,000 times that number who were slaughtered in 14 hours at Dresden. London suffered damages of only 6,000 acres througout the entire war, and in one night, 1,600 acres of land were destroyed in the Dresden massacre.
It is nice to see AMD expanding its company. I have been using AMD chips for several years now, and couldn't be happier. When a company spends the time and money to make developments in arcitecture, they should get something nice in return. Unfortunatly I don't feel intel has been making the advances. The Intel name has been carrying them for a while now, and its time AMD got their recognition.
I've been using the Athlon64 chips and couldn't be happier. Hopefully the new plant will help them nibble away another part of Intel's market share.
I live in the North of England, and at least the AMD plant is still around and AMD is a German company, unlike the white elephant of Siemens.
No, it's a very poor point, and while I may not agree with modding down of it, it certainly isn't in any way insightful. To use a cliche : "Give a man a fish and you've fed him for a day. *Teach* him how to fish and you've fed him for life. Sure $600k/piece would be enough for "the same people who'd work there anyway" to live off of for a few years, but the money will do far more good creating jobs and stimulating the economy.
Let me reiterate a point here: despite what Bill O'Reilly and Rush Limbaugh would have you think, socialism is not about getting something for nothing. The basic idea is to ensure that the whole of society is better off than if everyone were concerned only for themselves - sometimes that requires a lot of effort. As a bit of side commentary here, some of the more liberal European states are about as close to a workable, real world approach to socialism as is really possible.
As far as a possible double standard goes, I think the case is pretty weak. The no-bid contracts you hear "socialists" (don't you mean commie-pinko scum? I don't think you were inflamitory enough there) complain about are because Bush, and particularly VP Cheney have VERY close ties to the companies that were awarded those contracts. And by close, we're talking about Cheney having been the head of one of these companies just prior to entering office. Show me where PM Schroeder and his cronies have a direct interest in AMD other than stimulating the German economy and you might have a point. Until then, you're just flamebait.
That's right! Thanks to our center-left government, German Telekom (you know, T-Mobile) und Siemens (as in Fujitsu-Siemens) pay less in taxes than the janitors working there. And this is just the tip of the iceberg. Hurra to the forces of a free marked economy!
Free Manning, jail Obama.
even happier it was not near me..Horrible places that produce huge amounts of heinous sand some really AWFUL smells.
errr....umm...*whooosh* *whoosh* Is this thing on ?
Why would the government give a $683M break to AMD to get 1000 jobs?
The EU recently decided that it was illegal for local governments to subsidise private companies to do business in their region. Could be that AMD haven't quite thought this through...
Sometimes these things work out, sometimes they don't. There is a growing body of evidence in the US that cutting sweetheart deals to bring in some corporate facility can be a losing proposition. This one seems of a managable size, but in cases of large facilities employing thousands, there can be serious ripple effects as the local governments must build new roads, new schools, expand water treatment facilities, etc. In many cases, the sweetheart deal means the billion-dollar factory is not paying local taxes to help fund those expenses. Nor is it just the workers at the facility whose taxes pay those bills -- everyone who lived and worked there before gets hit with higher tax rates. Some people -- locals who get employed at the new facility at higher wages -- are clearly better off. Some people -- local workers whose wages stay the same but whose tax rates are higher -- are clearly worse off.
Here's an example. A few years ago, Denver, where I live, lost the bidding war for a new United Airlines maintenance facility to Indianapolis. The Denver paper recently ran a piece about how the deal worked out for Indianapolis. Most of the facility got built, and Indianopolis spent a boatload of money on infrastructure to support it. But United never actually started to use the facility -- so the jobs never materialized, the local property tax base has decreased because United doesn't pay those taxes under the deal terms, and Indianapolis taxpayers are out hundreds of millions of dollars spent on unneeded infrastructure.
And about the philosophy; even if you don't filthy rich most people have other motivations besides money for working hard. As long as people feel they get an appropriate share of the material growth they are happy.
So I don't think much of the ambition is removed from the individual as there is no signs that the progress of society halts in these countries.
Melius mori in libertate quam vivere in servitute.
But since our state government knows best, it must be done because it has a tremendous ROI.
I too, live in Washington State. We have one of the worst tax climates for businesses in the country, hence Boeing's eagerness to relocate. Basically, we taxed the living hell out of Boeing. When they decidided they wanted to move, the state government gave them ridiculous incentives to get them to stay. But, it was basically too late anyway. Many of the jobs have already relocated to Chicago and Kansas. We'll just have a shell of what we once had. Idiotic beauracracies allowed the lifeblood of the Seattle economy to slip away.
If you don't understand any of my sayings, come to me in private and I shall take you in my German mouth.
I lived in Dresden last year, and things haven't been too wonderful there since reunification. Lots of people have been leaving the city to head west, where there are better jobs. The city of Dresden actually pays people 300,- just to move there from other parts of the country (I think some other cities in the eastern part of the country do this as well). That money will easily cover the first month of rent in most areas of the city -- everybody I met would pay about 150,- per month.
That said, this will certainly help bring a little more 'balance' to the country (the Dresden VW plant also helps). 1000 high-paying jobs means potentially 1000 families...lots of little kids that need schoolteachers, food, clothes. I'm sure that the AMD plant will bring in way more money than this in taxes after a few years anyway...
The Right Reverend K. Reid Wightman,
As soon as I saw the first thing I thought of was Hyundai/Hynix and some of the other Enterprise Zone projects started in Oregon in the mid-late 1990's.
The Enterprise Zones were areas designated for industrial development that would receive special tax breaks for the first five years or so. It looked really good on paper, and politicians could say they were doing something about the high unemployment, which looked really good to them.
The two biggest projects were a CD-pressing plant owned by Sony in Springfield, OR and a DRAM plant owned by Hyundai in Eugene. Both were touted as creating lots of high paying jobs. Both actually were fairly good corporate citizens while times were good. A politically significant (~1000 total) jobs were created in the $9-10/hour range, though most of the engineering and management positions were filled by people brought in from out-of-state and out-of-country. A third company moved into supply packaging materials to Sony. Everyone was happy.
Then the economy went south. Hyundai canceled a planned expansion of its plant, went bankrupt, closed the plant for over a year while they upgraded the equipment after negoiating a multi-year extension to their tax-break package, then finally re-opened employing fewer people then before. When Sony couldn't get their tax-package enlarged and extended, they just up and left, as did the packaging company.
The final blow was when Komag, maker of hard-drive platters (and recipient of the smallest-subsidies) went bankrupt, sold-out its equipment and walked away from a once billion dollar facility that was one of the last plants making platters in the US (at least I think that is what the newspaper said).
The Enterprise Zone program is still on the books, but with a change in focus. Instead on trying to lure big companies to build big, they are rewarding smaller, more local companies who expand their operations. While companies like Sony received almost as much in tax breaks as they paid out in wages, the smaller firms generally receive tax breaks equal to 1-2 years wages for the additional jobs they create. The additional profits remain in the local economy and these local companies are less likely to up and walk away when the mood suits them. It doesn't make as good a press release, but is much more effective.
All in all, I hope Germany has better luck with AMD than Oregon did with its multi-nationals, but they should look at better ways to spend future tax-grant money.