Intel will close Mass. plant, cut 700 jobs. Obama says 70, 000 new jobs will result.

[Mike Broussard]

The brainless Obama administration will call this a victory and
progress.

The world’s leading maker of computer chips is closing its only
factory in Massachusetts, eliminating up to 700 high-paying
manufacturing jobs in one of the largest job cuts to hit the
state in recent years.

Intel Corp. said on Thursday that its plant in Hudson is using
outdated technology to make older generations of computer chips
used in low-end applications, which do not generate as much
profit as its higher-end microprocessors that are used in PCs.

“The facility and the site do not meet the requirements that we
need,” said Intel spokesman Chuck Mulloy.

The Hudson closing is a blow to manufacturing in the state,
which has undergone decades of downsizing to re-emerge as a
smaller but still highly competitive industry.

High-tech manufacturing accounts for nearly one in every three
factory jobs in Massachusetts, and many of those pay high wages
— $80,000 a year or more, according to a recent Northeastern
University report on the sector. And the Intel jobs would be at
the higher end of the industry scale.

“In terms of these people and their families, and the town of
Hudson, this is a major blow,” said the author of the
Northeastern report, economist Barry Bluestone, who noted that
overall job growth in Massachusetts has slowed in recent months.
“These workers who lose their jobs will not have an easy time
finding a job somewhere else.”

The plant closure also represents a setback to Governor Deval
Patrick’s major effort to build up manufacturing in
Massachusetts by supporting companies that produce sophisticated
products that are less prone to competition from low-cost
operators overseas. Until recently, manufacturing employment had
been stable in Massachusetts, with pockets of employers adding
jobs and some companies even complaining they were having
trouble finding qualified applicants to replace retiring workers.

The Patrick administration Thursday pledged to help any laid-off
Intel workers find jobs.

“While we are obviously disappointed by today’s news, we know
that our manufacturing industry is on the rise in Massachusetts
and will continue to play a significant role in the success of
our economy,” said Gregory Bialecki, the state’s economic
development chief.

Bluestone agreed that even though the 700 jobs are a big loss,
the manufacturing industry in Massachusetts is not facing
another period of contraction.

“Just because Intel is closing a shop doesn’t mean that we’re
turning into Detroit here,” said Bluestone.

Intel said it plans to close the Hudson facility by the end of
2014 but hopes to soften the blow by trying to find another
technology company that would buy the plant and continue making
chips there.

The company also operates a research and development facility in
Hudson employing additional 850 workers. It will not be affected
by the job cuts.

Home of former governor A. Paul Cellucci, Hudson is a former
mill town that in the 19th century attracted waves of immigrants
to work in its many shoe factories. In more recent years, it
prospered as the early computer industry grew up in suburban
Massachusetts around the old Digital Equipment Corp., based in
nearby Maynard.

The Intel plant was built in 1994 by Digital in its waning days
for $425 million to produce its highly touted Alpha chip, one of
the now-defunct company’s last-gasp efforts to keep up with a
rapidly changing computer industry. Though more powerful than
the best Intel processors of the era, Alpha failed to win
converts among computer makers because it was incompatible with
many common software programs.

The failure of the Alpha led to Digital’s exit from the
chipmaking business, and Digital sold the Hudson plant and
related properties to Intel in 1997 for $700 million. Digital
itself was acquired by Compaq a year later, ending a 40-year run
as one of the most storied names in the computer industry.

And now the Hudson’s factory run itself appears to be over.
Known in the computer world as a “fab,” short for fabrication,
the Hudson factory uses chip-making technology that’s more than
a decade old, putting it four generations behind the equipment
used in Intel’s more advanced factories. As a result, chips from
the Hudson plant are used in automotive entertainment systems,
factory automation equipment, and other relatively low-end
applications.

The Hudson plant does not produce Intel’s better-known and more
lucrative microprocessors, such as the Core, Xeon, and Atom
chips.

Mulloy, the Intel spokesman, said that bringing the Hudson plant
up to date would require building a facility twice its size and
that the lack of available land made this impossible.

“It’s not any reflection on the workforce there. It’s not any
reflection on the state of Massachusetts,” he said.

Nathan Brookwood, a chip industry analyst for research firm
Insight 64 in Saratoga, Calif., said that among Intel chip
factories, “the Hudson facility was always the odd man out.”

Intel designs its chip plants from the ground up to be identical
to one another, so that each can produce any chip in the
company’s inventory he said; by contrast, it acquired the Hudson
plant after it was built and it has never fully complied with
Intel’s standards. Brookwood added that Intel normally builds
new plants alongside its obsolete facilities but that the lack
of open land made it more logical to simply close the Hudson fab.

Municipal officials in Hudson were hopeful that Intel would make
good on its promise to find a buyer who would keep it open as a
factory, even if it is full of obsolete equipment.

“They have some of the best real estate people, and they’re
going to try to market the portion of the facility that’s
shutting down to get the best value that they can,” said
Christopher Sandini, the interim executive assistant for Hudson.

Intel said its current plan involves laying off about 100
workers over the next three to four months, with the remainder
of the workforce staying on until the plant is closed. These
workers will be offered a severance package and given two months
to find other jobs at Intel.

Mulloy said the plant will run near full capacity until it is
closed, in order to fill existing orders and to build
inventories of obsolete chips that will no longer be made once
the Hudson plant is shut down.

http://www.bostonglobe.com/metro/2013/09/12/intel-close-hudson-
plant-lay-off/wBpsOao3dJp6wbHxgcTmiO/story.html