Intel's Barrett slams U.S. tech/tax policies

Daniel Sorid

NEW YORK: Attacking U.S. government policies on taxes, immigration and Internet access, Intel Corp. Chief Executive Craig Barrett warned that the United States could be left behind when technology companies decide where to make their next big capital investments.

With less than two weeks left as CEO of the world's largest chip maker, the outspoken proponent of free trade and low corporate taxes said in an interview that Intel could save as much as $1 billion in taxes over 10 years by building its next factory outside of the United States, in a country such as Malaysia.

Such a decision, which would be worth $5 billion or more to the host nation, could come in the next year, Barrett said, unless the company decides to upgrade one of its sites in the United States.

"That weighs heavily on our minds, our directors' minds, on our shareholders' minds," Barrett said during a visit to Reuters Times Square offices. Though Intel has been criticized for seeking corporate welfare, Barrett said the company was pushing for the United States to give incentives that lower tax rates for companies that invest in the country.

"My opinion is it's unlikely the government will overcome its current position," he said.

"There are many locales that you can go to that have much lower corporate tax rates, even tax holidays for a period of time, and also capital incentives or training incentives at a national level," he said.

The 65-year-old Barrett, who is set to become Intel's chairman on May 18 at the company's annual stockholder meeting, has long highlighted what he views as the shortcomings of U.S. policies. Though based in California, Intel derives most of its revenue from overseas.

Heaping scorn on policies that keep green cards out of the hands of foreign graduates of U.S. universities and make truly high-speed Internet access a rare luxury, Barrett minced few words about his distaste for the federal bureaucracy.

"I challenge you to find anything coming out of Washington that smells like a digital initiative to increase U.S. competitiveness," he said, contrasting that with e-government initiatives in the United Kingdom, France and Germany, and smaller places such as the United Arab Emirates.

Turning away educated people who want to emigrate to the United States "has to be the dumbest thing in the world," he said.

"We allow people in the United States who are either here illegally and at the lower level of the value-add or work-force chain -- the weak, the sick, the infirm," he added. "We allow everybody in but the value-add people who have educational capabilities and the ability to contribute to the economy."

"If we haven't got it bass-ackward I don't know what we're doing," he said.

Saving his kind words for foreign capitals, Barrett said Intel was increasingly looking at India, which he said was becoming an attractive place to set up an assembly and testing facility, the lower-tier of Intel's manufacturing operations.

Earlier in May, India's information technology minister said he would travel to the United States to meet with Intel about setting up such a factory. Barrett said the comments were news to him. "As far as I know, none of them has an appointment yet with us," he said.

"That's beside the point," he said. "India is actually becoming more competitive as a location for assembly-test."

Europe, meanwhile, is also contributing to what he called the leapfrogging of the United States. "If you were to look at Old Europe -- UK, Germany, France, Italy -- each one of those governments has officially announced major programs to increase their compute infrastructure," he said.

"It's still a very aggressive place to do business."