Intel CEO Otellini - California Is on a Downhill Slide
Intel Chief Executive and San Francisco native Paul Otellini is not happy with the direction of his home state and worries that it could go the way of Greece.
Speaking on stage this week at the Intel Capital Global Summit in Huntington Beach, Calif., an annual gathering for executives of companies that Intel has invested in, Otellini was responding to a question from former California Republican Congressman Tom Campbell on whether he was “bullish” on California.
“Oh, God,” Otellini said, “I was born and raised here. I’m fifth or sixth generation. It’s one of the nicest pieces of real estate on the planet, and we’re so close to screwing it up, it’s pathetic. I’d like to be bullish, but I worry that we have to hit the abyss before we can fix things, and I worry that the abyss will be more like Greece.”
Intel, Otellini continued, has not added a job in California in 10 or 12 years and closed its last factory in the state around six years ago.
“Employees have a hard time buying houses, and they have complaints about the schools,” he said. They’re drawn to California despite the state’s high housing costs, heavy traffic and high tax rates because of “the allure of Silicon Valley, but then they get married and have kids, and they’re begging us, ‘Can you transfer me to New Mexico or Arizona?’ We’re not an outlier here.”
Were it not for “the magic of Silicon Valley,” Otellini said, more people would be leaving California than moving into the state. He called Silicon Valley “the one magnetic pull holding [California] together. Every now and then we get an IPO that fills the state’s coffers and they feel they can push the ball down the road. I feel we have to go through a dark time to fix this.”
Otellini’s remarks were part of a pessimistic conversation between him and Campbell on the state of the economy, including persistent unemployment, the size of the U.S. deficit, the troubles in Europe and China, the uncertainty for businesses created by too much regulation and taxation, the unwillingness of big banks to lend to businesses and the looming fiscal cliff.
Otellini told Campbell that if Campbell “comes out of retirement” and runs for California governor (Campbell was beaten for the U.S. Senate and is now dean at Chapman University School of Law), Otellini would support him.