GlobalFoundries: Too big to fail?

Chittenden County is blessed — and a little bit cursed — by the presence of a large high-tech employer: GlobalFoundries, formerly d.b.a. IBM. The Essex facility is a major driver of the area’s economy, and the entire state’s economy for that matter.

And GlobalFoundries knows this, and they seem to know they have us over a barrel.

This is my inference based on a new report by the Associated Press’ master gardener Dave Gram, who has used public-records requests to discover the extent of GF’s demands on the state.

We already knew about the questionable $1 million from the Enterprise Fund. Gram now brings us tidings of a $17 million highway project that GF wants fast-tracked. It would involve improvements on Route 22A, which happens to be the most direct route from the Burlington area to New York State. (22A goes straight through downtown Vergennes. Hope you like your new highway, Vergennians!)

But otherwise it’s of little utility to intra-state traffic. For general transportation, trade and tourism puposes, improvements to US-7 would be more efficacious. But I have a feeling that what GlobalFoundries wants, GlobalFoundries will get.

(Now, if GF can convince New York State to build a decent highway from the Vermont border west of Rutland to I-87, then that would be a great benefit to the western Vermont economy as a whole. If they can do that, then our investment in 22A would be a worthwhile tradeoff.)

GlobalFoundries also wants state backing for “payments to GlobalFoundries from the Regional Greenhouse Gas Initiative, a multi-state pact that spins off money to states with a low carbon footprint.” Gram’s report doesn’t go into the reasoning behind GF’s request; in the absence of more information, I have a feeling that there are more pertinent uses for the money.

But hey, GlobalFoundries is a yoooge employer, and its loss would cripple Vermont’s economy. We may not have much choice.

Indeed, as Governor Shumlin has so graciously put it,

“The reality is GlobalFoundries is an extraordinary job creator,” the governor said. “We’re darn lucky to have them. And if we’re too dumb to partner with them you won’t find this governor joining you.”

Yeah, thanks, Gov. Implying that anyone who disagrees with you is “too dumb” is the kind of thing that dumped your approval rating into the root cellar.

And really, as far as I’m concerned, the problem isn’t necessarily with the GlobalFoundries giveaways themselves. It’s the process.

Remember the Emergency Board’s approval of the $1 million Enterprise Fund gift grant? Here’s the way it went down.

— On December 29, the agenda packet for the Emergency Board’s January 8 meeting was printed. But it was not made public for more than a week afterward.

— On January 6, during his State of the State Address, Governor Shumlin introduced two GlobalFoundries executives and praised their commitment to Vermont.

— Later that afternoon, near the end of the business day, the Emergency Board’s agenda was finally published. The meeting was scheduled for 8:30 the next morning, giving interested parties virtually no chance to prepare. Or even show up.

— The Board met on January 7 at 8:30 am, and approved the GF grant.

As I wrote at the time, “if Shumlin ever wonders why he has a reputation as a slippery dealmaker, well, here it is.”

Look, I understand that Vermont is on the short end of this stick. We need GlobalFoundries more than they need us. I don’t doubt that, once these requests work their way through the corridors of power, there will be more requests and demands to follow.

And maybe it’s just the cost of doing business. But please, Governor — the process is making you look bad, and giving the whole relationship an unpleasant odor.

Here’s my bottom line: I don’t necessarily mind if public funds go to certain businesses. But I damn well want the process to be thoroughly transparent. If a company wants to benefit from public largesse, it should be willing to play by the rules of the public sector: openness, transparency, full discussion and debate. And there should be measurable performance standards, which are curiously absent from the Enterprise Fund grant.

If you’ve got a good argument, then stop slinking around and just make your case.

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6 thoughts on “GlobalFoundries: Too big to fail?

    1. ApacheTrout

      If they are looking for improvements to Route 22A, that suggests they are sticking around for a while. I also think that the recent investments in operations and equipment indicate that the Essex Junction facility is on stable ground. I don’t view Global Foundries as an extortion outfit.

      While I completely disagree with the Enterprise Fund disbursement as a sound investment, I’d very much like to hear what improvements are proposed for 22A. Most people in Vermont would probably be surprised to know that 22A is the major transportation corridor connecting Albany (and points south and west) to the Burlington area. Tractor trailer traffic is virtually non-stop on the two-lane road, and trucks idling at traffic lights or rumbling slowly through Vergennes degrades the vitality of the downtown business district. Improvements that allow trucks to bypass the downtown region and increase the efficiency of truck movement should not be viewed as a hand-out to Global Foundries, but as a benefit to Vergennes and the greater economy.

      Reply
      1. Cc

        Even if it turns out to be the best move for the state, a lack of transparency makes it hard to trust the administration on it going forward, since we don’t know how much influence Global Foundries has.

  1. Eddo

    As one who is on Rte 22A every day, driving through Vergennes, I agree with Apache Trout. Years ago there was a proposal for a Vergennes by-pass, which would include a new bridge over Otter Creek. There were mixed feelings about its effect on Vergennes, because while a by-pass reduces annoying truck traffic, it also reduces tourist traffic through town. Around here 22A is known as Gasoline Alley for the dozens of gas-laden tractor trailers that use it to get to western Vermont. I’d be happy to see them diverted, but based on the number of out of state plates I see parked on Main St in Vergennes, I’d hate to see them disappear.

    Reply
  2. chuck gregory

    Let’s not kid ourselves: Improvements to 22A will simply expedite moving the Essex facility to New York state.

    We need to re-think the purchases of Vermont businesses by multinationals. Vermont could have made hundreds of millions in revenue off the giveaway of this plant to GI.

    Reply

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