Sour Grapes
Of course we're Fair and Balanced!


A CEO to respect

Cypress Semiconductor's CEO T. J. Rodgers sounds like the kind of person I could like working with. He was interviewed last month by Declan McCullagh and had some very interesting things to say. Not that I agree with everything he says. But it seems one would have little difficulty knowing exactly where he stands.

On out-souring jobs overseas (I must confess that I'm a contrarian on Benedict Arnold and tend to think kindly of anyone toward whom this kind of pejorative is aimed]:

Q: John Kerry is denouncing "Benedict Arnold" CEOs who send jobs overseas. Is it moral for American companies to increase their overseas outsourcing?

A: It is immoral for any CEO not to run his company in the best possible financial way for his shareholders. I used to hold Kerry's naive view of the "all American" company, meaning all jobs in America. That was a foolish mistake on my part, and it cost my shareholders a lot of money, until I moved our entire assembly and test operation and several hundred jobs offshore in 1992.

On corporate welfare:

Q: You want to eliminate corporate welfare, including for the high-technology industry. In 1999, you told Congress the way to do it was simple: Put all pork barrel projects in a single package, and hold an up-or-down vote. Everyone ignored you.

A: They're not serious at all about eliminating corporate welfare. The Democrats also accuse the Republicans of cozying up to business. I made my first call to eliminate corporate welfare to the then-new Clinton administration. And I was never treated with more hostility than by Congresswoman Anna Eshoo, a Democrat from California, and Democrat Herbert Klein from New Jersey. Both of them were condescending and insulting — beyond just disagreeing with me. Corporate welfare is a sacred cow for the Democrats as well as the Republicans.

On the Governator:

Q: What's your opinion of Arnold Schwarzenegger?

A: I think his $15 billion bond offering is really screwed up. But I think that he's trying to do a good job, and I think he's honest.

On the GWB:

Q: Are you planning to vote for President Bush in November?>/p>

A: I haven't heard what John Kerry's got to say. I've read a lot of ugly stuff about him. I don't follow campaigns. I don't give money to them, I don't listen to them — they're a waste of time. Ordinarily, it would be a knee-jerk reaction for me to vote for an incumbent Republican, but Bush has done a bad enough job that I'll look at all the candidates and make a decision....

The Republicans are supposed to be a party of free trade and economic freedom. Bush has been one of the worst free-trade presidents we've had in a long time. He is a big spender who makes Bill Clinton look like a penny pincher. I doubt that I'm going to find Kerry to be a viable alternative. This year, if the Libertarians put up a non-nut, I may end up voting for a Libertarian.

On California's business climate

Q: You still have a small fab in San Jose. Are you thinking of expanding it or building another in California?

A: ... You'd be insane to open a manufacturing fab in California. You need a big piece of land, you need freeway access to it for your employees, you need water and power, and you need a local government that wants you there. Then you need a local or several local schools to provide you with a relatively large number of trained people to work in the plant. You obviously want to pay wage rates that make you competitive in the world. What I described is not California....

The killer factor in California for a manufacturer to create, say, a thousand blue-collar jobs is a hostile government that doesn't want you there and demonstrates it in thousands of ways, through bureaucrats and regulations.

On the expensing of stock options:

Q: You're a vigorous opponent of the mandatory expensing of stock options. It looks as if the Financial Accounting Standards Board is going to require it. (Note: This interview took place before the board voted for expensing stock options.)

A: ... Fundamentally, stock options shouldn't be expensed. It's mathematically obvious for anyone who can count, which doesn't include professors at the Stanford and Berkeley business schools.

What will happen if we expense stock options is the exodus of every tech company from Generally Accepted Accounting Principles to pro forma accounting. They've finally made the product so bad that nobody will use it.

On the outlook for tech jobs:

Q: What's your advice to anyone considering looking for a job in this field?

A: There are jobs out there. The unemployment rate in Silicon Valley is low. Technology and science is where the world is going. A career is something you live with for 40 years or more. You don't make your decision on what's up and what's down.

All in all, it's the most interesting interview of a CEO I can remembering reading.

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