Is GlobalFoundries worth the billion-dollar investment?
New York State gave away an unprecedented incentive package - worth over a billion dollars - to lure the computer chip manufacturer GlobalFoundries to the Albany suburb of Malta.
Now that the massive economic development project is finally up and running, people are lining up for jobs.
Governor Andrew Cuomo says he wants to see similar tech clusters emerge in other regions. And to replicate the Capital Region’s success, Cuomo says he’s ready to dish out more state perks.
At the most recent career fair for GlobalFoundries in Saratoga County, the line of people hoping for a job spilled out the door and around the block.
Nearly 1,500 applicants turned out for 300 open positions at the company’s new plant, which is known as Fab 8.
Like many of the applicants, Evelyn O’Brien waited for over an hour to get in front of one of the company’s representatives.
“I just lost a job at a local coffee shop - because they didn’t want to give me health insurance,” says O’Brien.
But even as O’Brien hopes for a better job with GlobalFoundries, she’s not thrilled that the company benefited from an enormous subsidy from New York taxpayers.
“I don’t like that,” she says. “It’s nice that they lure them here. [But] I’ve been told that after seven years they pick up shop and go somewhere else. So I’m just waiting to see if the ball’s gonna drop. Hopefully that does not happen.”
Other applicants say the investment was worth it.
Christian Van Deinse is hoping to get hired for an engineering position.
“New York’s been struggling,” he says, “and getting something of this magnitude is going to be nothing but a boon for the state.”
Up and running
Making computer chips is a notoriously tough business to be in, and the state took a risk by helping fund the GlobalFoundries project.
But a few weeks ago, Fab 8 finally started producing wafers for its first client, IBM.
“We’re making 300 millimeter wafers,” says Jessica Kerley, a spokeswoman for GlobalFoundries. “They’re about a foot in diameter. And then from there, the wafers are cut up into the computer chips and they’re sent to our customer.”
Kerley adds that many of the new jobs only require an associate’s degree - and that the average salary at the chip fab is around $60,000.
Imported work force?
The company has already hired 1,100 workers, but only about half of them are native to New York State.
Many of the others are highly-skilled international recruits, representing 30 different countries.
Kerley says those numbers will shift as GlobalFoundries partners with local schools to improve the educational pipeline.
“We obviously have a great commitment to the Capital Region and we’re really looking to hire a lot of local employees,” says Kerley.
Even if locals don’t land a job with GlobalFoundries, Mike Tucker, the president of the Center for Economic Growth in Albany, says the local tech cluster creates even more jobs in related industries.
“You don’t have to be a techie to be able to benefit from the economic growth and development that will come from the tech boom in our region,” Tucker says.
It’s an approach the governor wants to export to other parts of the state that are struggling.
More clusters, more incentives
At his State of the State Address last week, Governor Cuomo announced that New York will invest $1 billion to boost Buffalo’s economy.
And Albany is the model.
“There’s a vibrancy in the Capital District region around nanotechnology that would not have happened but for the state’s investment,” Cuomo said in his speech. “If we did it in Albany, we can do it Buffalo.”
The governor is expected to announce how he intends to pay for that economic boost when he lays out his 2012 budget proposal next week.