Business wants to save US jobs, 1 chip at a time


WASHINGTON (AP) – Commerce Secretary Gina Raimondo only wears watches made by Bulova – a company that laid off its scientist father, closed its Rhode Island factory and moved production to China in 1983.

The watches give Raimondo, a former governor of Rhode Island, a sense of mission as President Joe Biden’s de facto technology minister, a responsibility that focuses on adding the kinds of factory jobs to tip who are now overseas.

“It’s a tribute to my father,” Raimondo said of his watch choices in an interview, “and a reminder to me that we need to do more to get good manufacturing jobs in America.”

Biden tasked Raimondo with making sure the United States is the world leader in computer chips. America’s place at the top of the world as an economic and military power – as well as its political fortunes – may depend on its performance.

The computer chip has become the essential ingredient in automobiles, medical devices, telephones, toys, washing machines, weapons and even some watches. But a global shortage is weighing on growth and fueling inflation. Without the computer chips that serve as switches for today’s economy, the United States could be eclipsed by China and other countries that support their semiconductor industries.

To end the shortage, 50-year-old Raimondo must restart production of chips as well as solar panels and batteries on the assumption that these sectors are essential to prosperity. That means consulting semiconductor executives almost daily, tracking data on plant closures in Asia, seeking additional government support for those industries, and making his department more than a generic envoy for companies.

“If we do our job well, and I think we will, in 10 years you will see a manufacturing industry that is fundamentally more vibrant, bigger and revitalized,” said Raimondo. “It’s a national security issue that we don’t make advanced semiconductor in America, that we don’t make enough solar panels in America, that we don’t make critical batteries in America. It makes us vulnerable, not just economically. “

Raimondo’s tenure in Commerce received a lot of publicity for a department that some presidents paid little attention to.

The former secretary was billed as a murderous negotiator, but Wilbur Ross was best known for falling asleep at events hosted for President Donald Trump and attempting to explain the tariffs by holding up a can of soup on TV. The Obama administration has spent an entire year with just one acting secretary.

Raimondo has bonded with Biden, who often quotes his own parents when presenting his policies. Political allies have noted her own ambitions after she was interviewed last year as Biden’s potential running mate. The Commerce Department could be the springboard for a Democratic Party increasingly formed by women with a university education.

“It is someone, like the president, who knows the pain of a job loss for a family, and has never forgotten where it came from and the real impact of economic and trade policies on real people, “White House chief of staff Ron said. Klain.

Rhode Island contains grand Newport mansions that once belonged to America’s richest families and factories that attracted Italian immigrants such as Raimondo’s grandparents. This mixture of size and breadth of social class gives its politics an unusual intimacy.

Joseph Raimondo lost his job as a chemist at the Bulova factory when his youngest child was in sixth grade. Admirers of her daughter and even some detractors say this formative event made her competitive and as painstakingly detail-oriented as a watchmaker.

She is known to email staff on policy ideas until midnight and as early as 6 a.m. Tech CEOs say she works like them: straightforward, focused, full of questions.

Rhode Island was still a manufacturing state when Raimondo left for college in 1989. Over 20% of the state’s jobs then were in manufacturing; now, only 8% are, according to the Bureau of Labor Statistics.

Raimondo’s story is a microcosm of the American economy, which emerged from WWII with its manufacturing power intact. But lower wages abroad have siphoned off factory jobs and the economy has been redesigned for college graduates and the digital age.

The smartest or luckiest children of former metalworkers and auto workers graduated from top universities, just like Raimondo.

Like so many of his generation who witnessed America’s industrial decline through family experiences, Raimondo worked to be part of the meritocracy. She worked for a federal judge and became a venture capitalist, while marrying a husband of similar pedigree, Andy Moffit. Federal ethical disclosures put his wealth at $ 10 million.

Raimondo has long been interested in the finer details of what makes people and systems work. Bob Walsh, executive director of Rhode Island’s main teachers’ union and a former banker, recalls being questioned by Raimondo over lunch.

“Why are you doing what you are doing?” Raimondo asked him. “You could make a lot more money doing something else.”

Prior to winning her first governorship in 2014, Raimondo took controversial steps as state treasurer to bolster Rhode Island’s strained public pension fund. It meant pushing back the teachers’ union to raise the retirement age and suspend cost-of-living adjustments. Many unions opposed her in the primary. But Walsh personally supported her in the general election and provided organizational support for her re-election in 2018.

In predominantly democratic Rhode Island, Raimondo learned to govern by forming coalitions within a diverse caucus. State Senator Sam Bell, one of Raimondo’s main Democratic opponents, said she was “brilliant and effective” – ​​but in a way that he said has drained Medicaid and other services for them. poor.

Now, Raimondo’s ability to analyze numbers to explain politics comes into play on multiple fronts as she pushes the Biden infrastructure deal forward, resolves clogged supply lines, and promotes the CHIPS Act of 52. billion dollars to increase the manufacturing and research of computer chips.

“She’s powerful at presenting data,” Walsh said. “His ability to make a strong presentation and to understand the multiplicity of issues can once again be an asset. “

For much of his life, the key to economic growth was efficiency – wages and inventory kept just in time, lest any excess supply would reduce profits.

Then the pandemic disrupted chip production just as demand increased, with people working from home becoming increasingly dependent on their electronics. The fragile supply chain has also been affected by extreme weather conditions and other factors.

“If the ships stop, all of these efficient supply chains collapse very, very quickly,” said Revathi Advaithi, who speaks frequently with Raimondo as CEO of Flex, one of the largest companies. services from manufacturers of electronic products to the world. “The pandemic is only part of it. Our point of view is that this has been happening for a long time. “

The United States now needs a more diverse network of manufacturers closer to home to avoid shutdowns and minimize damage from disasters. It needs built-in safeguards that make it easier to restart factories after they close. It also means that it needs more jobs in the high-tech manufacturing sector.

Raimondo predicts that the computer chip shortage will last well into next year – and hurt. The White House noted in a September report that the shortage could reduce economic growth by one percentage point this year.

“We’ve probably all underestimated how much COVID disrupts our supply chains,” Raimondo said. “We have just brutally shut down our economy. Auto manufacturers have just stopped ordering semiconductors.

The United States once accounted for 40% of the world’s chip manufacturing; now it’s 12%. The cost of manufacturing a chip in the United States is 30% higher than in Taiwan and South Korea. A chipmaker must spend tens of millions of dollars on a prototype before seeing any revenue, a drag for start-ups.

For the traps of a technocrat, Raimondo makes choices in personal terms. When Biden interviewed her for Commerce, he knew her father. The move to Washington seemed natural, but Raimondo feared uprooting his teenage children, Cecilia and Thompson.

Her brother’s advice: Take the job. For their father.


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