Sunday, October 2, 2022

Commerce head out to save US jobs, 1 computer chip at a time

WASHINGTON (AP) – Commerce Secretary Gina Raimondo wears only a Bulova watch, a company that fired its scientist father, closed its Rhode Island factory and moved production to China in 1983.

The watch gives Raimondo, the former governor of Rhode Island, a sense of mission as President Joe Biden’s de facto minister of technology, a responsibility that focuses on adding cutting-edge manufacturing jobs now overseas.

“It was a tribute to my dad,” Raimondo said of her choice of watches in an interview, “and reminded me that we need to do more to get good manufacturing jobs in America.”

Biden tasked Raimondo to ensure that the United States becomes the world leader in computer chips. America’s place at the top of the world as an economic and military power, as well as its political status, may depend on its results.

The computer chip has become an indispensable ingredient in cars, medical devices, phones, toys, washing machines, weapons, and even some watches. But global deficits are stalling growth and fueling inflation. Without the computer chips that serve as the switches of today’s economy, the United States could outshine China and other countries that support their semiconductor industries.

To end the shortage, 50-year-old Raimondo must bring back the production of microcircuits, as well as solar panels and batteries, on the premise that these sectors are the keys to prosperity. This means she consults with semiconductor executives almost daily, tracking plant shutdowns in Asia, seeking additional government support for these industries, and making her department more than just a messenger in business.

“If we do our job right, and I believe we do, in 10 years you will see a fundamentally more dynamic, larger and renewed manufacturing industry,” said Raimondo. “The national security problem is that we don’t make any advanced semiconductors in America, that we don’t make enough solar panels in America, that we don’t make critical batteries in America. This makes us vulnerable not only from an economic point of view. ”

Raimondo’s work in commerce has been prominent in a department that has been overlooked by some presidents.

The previous secretary was touted as a bargaining killer, but Wilbur Ross was best known for falling asleep at President Donald Trump’s events and trying to explain tariffs by showing a can of soup on TV. The Obama administration has worked for an entire year with only an acting secretary.

Raimondo became close to Biden, who often quotes his parents as he sets out his policies. Political allies highlighted her own ambitions after being interviewed last year as a potential Biden partner. The Department of Commerce could be a stepping stone in the Democratic Party, which is increasingly being formed by women with higher education.

“She is a person like the president who knows the pain of losing a job to a family and never forgets where she comes from and what real impact economic and trade policies have on real people,” said White House chief of staff Ron. Kline.

Rhode Island has stately Newport mansions that were once owned by America’s wealthiest families and factories that attracted Italian immigrants like Raimondo’s grandparents. This combination of the size and breadth of a social class lends its politics an extraordinary intimacy.

Joseph Raimondo lost his job as a chemist at the Bulovo plant when his youngest child was in sixth grade. His daughter’s fans and even some detractors say that this defining event made her competitive and as meticulously focused on detail as a watchmaker.

She is known to have emailed employees with policy ideas before midnight and as early as 6 a.m., according to tech executives, she works the same way as they do: direct, focused, full of questions.

When Raimondo left college in 1989, Rhode Island was still an industrial state. At the time, more than 20% of the state’s jobs were in manufacturing; now only 8%, according to the Bureau of Labor Statistics.

Raimondo’s story is a microcosm of the American economy that emerged after World War II with manufacturing power intact. But lower wages abroad crowded out factory jobs, and the economy was reorganized for college graduates and the digital age.

The smartest and most fortunate children of former steel and car makers received degrees from the best universities, like Raimondo.

Like many of her generation who witnessed the industrial decline in America through their own family experience, Raimondo aspired to be part of the meritocracy. She worked as a clerk for a federal judge and became a venture capitalist by marrying an equally pedigree husband, Andy Moffit. According to published federal ethics guidelines, her fortune is estimated at $ 10 million.

Raimondo has long been interested in the finer details of what drives people and systems. Bob Walsh, executive director of Rhode Island’s Leading Teachers’ Union and a former banker, recalls Raimondo asking him questions over lunch.

“Why are you doing what you are doing?” Raimondo asked him. “You could have made a lot more money doing something else.”

Before winning her first term as governor in 2014, Raimondo took controversial steps as state treasurer to bolster Rhode Island’s busy state pension fund. This meant that the teachers union would have to raise the retirement age and suspend cost-of-living adjustments. Many unions opposed her in the primaries. But Walsh personally supported her in the general election and provided organizational support for her 2018 re-election.

In predominantly democratic Rhode Island, Raimondo learned to govern by building coalitions within various groups. State Senator Sam Bell, one of Raimondo’s main Democratic opponents, said she was “brilliant and effective,” but in a way that he believed ruined Medicaid and other services for the poor.

Now, Raimondo’s ability to analyze numbers to explain policy comes into play on multiple fronts, as it advances Biden’s infrastructure deal, removes clogged supply lines, and promotes the $ 52 billion Chip Act to boost computer chip manufacturing and research.

“She’s strong at presenting data,” Walsh said. “Her ability to make a compelling presentation and understand a variety of issues can again be an asset.”

For most of her life, the key to economic growth has been efficiency – payroll and inventory were kept on time so that any excess inventory would not hurt profits.

The pandemic then interrupted chip production just as demand grew, as people working from home became more dependent on their electronics. The fragile supply chain has also been hit by extreme weather and other factors.

“If the ships stop working, all of these efficient supply chains will fall apart very, very quickly,” said Revati Adwaiti, who often speaks with Raimondo as CEO of Flex, one of the world’s largest electronics companies. “The pandemic is only one part. In our opinion, this has been happening for a long time. “

The United States now needs a more diverse network of manufacturers closer to home to avoid downtime and minimize damage from natural disasters. He needs fault-tolerant devices that make it easier to restart factories after shutdown. It also means he needs more high-tech jobs.

Raimondo expects the computer chip shortage to last until next year – and it will hurt. The White House noted in a September report that the deficit could cut economic growth this year by a full percentage point.

“We’ve all probably underestimated how much COVID will disrupt our supply chains,” Raimondo said. “We just stopped our economy abruptly. Automakers just stopped ordering semiconductors. “

The United States once accounted for 40% of the world’s chip production; now 12%. The cost of making a chip in the United States is 30% higher than in Taiwan and South Korea. A chipmaker has to spend tens of millions of dollars on a prototype before it sees any revenue, a hindrance to startups.

Raimondo chooses the attributes of a technocrat on his own terms. When Biden interviewed her for Commerce, he knew about her father. Moving to Washington seemed natural, but Raimondo worried about uprooting his teenage children, Cecilia and Thompson.

Her brother’s advice: Get to work. For their father.

Nation World News Desk
Nation World News Deskhttps://nationworldnews.com
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