Washington, DC – Members of CHIPS Communities United (CCU), a coalition of unions, environmental, social justice, civil rights, and community groups, responded to the contract between the CHIPS Program Office and Intel Corp. for four facilities in Arizona, New Mexico, Ohio, and Oregon. The coalition applauded the improved transparency from the Commerce Dept. (compared to the first CHIPS Act contract to be announced) but raised concerns about the lack of firm, transparent job creation and job quality commitments, supposedly a central goal of the CHIPS and Science Act. This absence is particularly troubling given Intel’s highly publicized financial woes and massive layoffs.
Given Intel’s very visible crisis – its losses, lay-offs, and Monday’s sudden announcement of CEO Patrick Gelsinger’s departure – it is vital that public investment involve concrete commitments from the company. The state of Ohio has stronger public reporting for its contracts with semiconductor companies than the federal government. Ohio’s contract with Intel (for an incentive grant less than 10% the size of the CHIPS Act grant) includes jobs metrics as a performance obligation of the company, requires public reporting of specific jobs metrics, has significant penalties for not meeting them, and the contract itself is considered a public record.
When it comes to environmental issues, CCU applauded the improved transparency but voiced concern about the limits to contractual commitments.
CCU appreciated the following commitments in the community impact report:
- The commitment to create workplace health and safety committees with worker participation
- The commitment to adopt the most protective health and safety standards for chemical exposure
- The commitment to segregate PFAS-containing waste for treatment and disposal
- The commitment to make environmental compliance public when it comes to energy and water use
- The commitment to use a project labor agreement (and thus employ unionized construction workers) for one of the four sites
But despite the release of a community impact report, the public announcement does not include transparent enforceable commitments to ensure that public funds create good jobs. The CHIPS and Science Act was passed in order to create reliable, family-sustaining manufacturing jobs (among other objectives). But the contract with Intel as publicly reported does not commit the company to job creation, workers’ right to organize, or wage and benefit standards. Specifically:
- Based on the announcement and community impact report, the contract lacks job commitments from the company including: minimum number of full-time equivalent jobs to be created or retained, minimum hourly wages to be paid, minimum hourly benefit levels to be given, annual cost of training provided for each job classification, and which classifications will be temporary workers, contractors, or direct employees of Intel. The absence of job creation commitments is particularly relevant given that Intel is currently laying off 15% of its global workforce and has already laid off about 2,000 US workers.
- The announcement does not include a commitment from Intel to allow its workers to join a union free from intimidation, captive audience meetings, exposure to anti-union consultants, threats of retaliation, and other obstacles to achieve bargaining. The absence of such commitments is particularly relevant given Intel’s history of anti-union comments.
- The announcement says Intel will adhere to the administration’s Good Jobs Principles, but does not specify what that will involve nor require the company to report publicly on its compliance.
CCU also expressed concerns about Intel’s environmental commitments.
- According to the public language, management of toxic chemicals, a concern both to workers and to the surrounding community, will be regulated by guidelines developed by industry – SEMI’s S2. Unlike government regulations, this standard is not easily available for public inspection since it is proprietary, copyrighted, and can only be inspected by purchasing it. Allowing a regulated entity to write the regulations that will be applied to it violates basic principles of good government. Ultimately, S2 is no substitute for protective workplace health and safety regulation, which has historically been missing in semiconductor production.
- Despite commitments to segregate highly toxic forever chemicals (PFAS) and dispose of them, CCU remains concerned about how PFAS waste will be separated, stored, and treated and what the environmental impacts will be for nearby communities.
- Though Intel claims it will meet its electricity needs with 100% renewable energy, the company’s main strategy for doing so (buying unbundled Renewable Energy Credits or RECs) is widely understood to do little to expand renewable energy capacity. Intel could purchase renewable energy credits from sub-Saharan Africa, for example, but the facility’s massive energy use will increase the need for fossil fuels in the four US electricity markets where it operates. In Maricopa County, for example (where Intel’s Ocotillo Campus is located), only 3% of the electricity comes from renewables, while the rest comes from polluting coal and gas plants, mostly located in low-income communities of color.
- The contract does not require Intel to use low-carbon domestic-building materials.
Finally, the public announcement failed to specify the penalties or clawbacks the Commerce Dept. would impose if Intel failed to meet workforce, health and safety, or environmental milestones and metrics. The public announcement also doesn’t clarify the conditions under which Intel would incur penalties for non-compliance with workforce or environmental commitments or if the company violates federal law.
The coalition urges the Commerce Dept. to address these concerns in future contracts, including the contracts with Samsung and Micron.
Quotes
Shawn Fain, president of the United Auto Workers: “A company that receives $8 billion from US taxpayers while laying off 15% of its global workforce ought to be held to high standards for job creation and job quality. The semiconductor industry can be a high-road employer, but it has a track record of low pay for production workers, lax standards for exposure to toxic chemicals, and union busting. The government’s contract with Intel should require the firm to show leadership in creating good, family-sustaining, union jobs.”
Ben Jealous, executive director of the Sierra Club: “The Sierra Club supports Intel’s aspiration to be a green company, and Intel’s contractual commitment to 100% carbon-free energy is particularly exciting. We thank the Biden-Harris administration and Commerce Department for proving that chipmakers can be held to transparent environmental standards while bringing semiconductor manufacturing jobs to American communities. Intel should use this opportunity to publicly detail its plan to make chips here with clean energy, instead of relying on accounting gimmicks that give companies credit for buying renewable energy made elsewhere.”
Bailey Sandin, Policy Matters Ohio: “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. Yet the company already is backtracking under the agreement from its earlier pledge to build two Ohio production facilities in the next few years, significantly reducing the number of jobs to be created.”
CCU is a coalition of unions, environmental organizations, and community-based groups. This press release was approved by CCU members IUE-CWA, Good Jobs First, International Campaign for Responsible Technology, International Federation of Professional and Technical Employees, International Union of Painters and Allied Trades, Jobs to Move America, Jobs with Justice, Sierra Club, and the United Auto Workers.
