Skip to comments.Proposal Letter Reshaping NY State's Subsidy for AMD Chip Fab Plant [Vanity => Public Service]
Posted on 01/05/2009 5:02:34 PM PST by Fitzy_888
Albert P. Carey, President and CEO
Frito-Lay North America 7701 Legacy Drive Plano, Texas 75024
Dear Mr. Carey,
I would like to make a proposal for Frito Lay to consider. Please bear with me as I 'Lays' the ground work.
If your not aware, New York State is offering 1.2 Billion dollar subsidy for a chip fabrication plant to be located in Saratoga New York. We the citizens of New York, are led to believe this is an effort to bring new jobs to the State roughly 1,400 jobs. The State has been in lengthy discussions with Advanced Micro Devices (AMD) about a prospective chip plant. AMD has for a long time waffled despite the fact that the subsidy would be worth, by some estimates, $1 Million per new job. There is concern that the useful life of the chip plant is ten years typically and the subsidy would amount to $100,000 per year, per AMD job.
Many taxpayers, rightly so, are trouble by the fact that AMD has shed over 25% of its work force in 2008 and AMD stock has lost roughly 70% of its value in the last 12 months. Not to mention the fact that the majority ownership in AMD is now held in the Emirates of Abu Dhabi. And, the the incentives have now been transfered to the AMD spinoff: "The Foundry Co. backed by the Advanced Technology Investment Co. of Abu Dhabi and Mubadala Investment, an investment arm of the Abu Dhabi government."
While business continues to leave the state and organic growth is treated with the herbicides of taxation and regulation -the citizen is left to wonder what the next niche industry might cost?
Frankly, if this deal goes through, it looks as if the New York State tax payer is 'Toastitos'.
First, let me say, as we all know: Frito-Lay is the undisputed chip champ of North America. Further, the products of Frito Lay and that of your parent company Pepsico Inc. are American icons.
Having stated that above, my proposal is simple. Id like to call it the Frito Rule, but we can call it something else if you insist. Anyway, the classic Frito chip is unique in that it has four sides think Frito Factor equal to 4; and, Frito Ratio equal to one fourth.
Here goes. We suggest Frito Lay seek to construct a chip fabrication plant in Saratoga New York. Frito Lay would receive one fourth of the AMD subsidy, or roughly 300 million dollars, furnished by the State of New York. In exchange, Frito Lay must create four times the jobs that AMD is proposing. And, one fourth of those jobs must be in food science, product testing, or otherwise technically skilled surely this is part of the work force at your current snack chip plants.
Note the benefits are not only in the form of incentives, this is also a green initiative. Note that Railex USA operates what is commonly referred to as the produce train between Wallula, Washington and Rotterdam, New York. Rotterdam is approximately 20 miles from the proposed site and a railroad spur to the site may be feasible. Or, the chip plant might be located in Rotterdam as the surrounding area actually needs economic development, even better! Back to the railroad, there are actually two trains per week crossing the country in five days carrying produce from the West to the East. It is likely the backhaul (the return trip) capacity is under utilized. This backhaul might serve as a backbone of distribution supplying the entire western United States with Frito Lay products. As the recent advertising would suggest, the railroad could move one ton of Sun Chips 436 miles on one gallon of diesel fuel. Considering the packaging requirements, you can ship Frito Lay chips at much high density that AMD chips.
Now you may have a very real concern about corruption and graft given the reputation of New York politicians. Indeed, were tempted to call them 'Cheatos'. For that reason we strong suggest this proposal be presented to the public directly, thereby avoiding the circumstances that facilitate moral hazard.
Ultimately, it appears the State is set on subsidizing a new employer at the site. In the spirit of foregone conclusions, as opposed principle, we must endeavor to reshape this subsidy. As you know, a majority of New Yorkers enjoy (value) Frito Lay product often, if not on occasion. The suggestion that a value judgment between AMD chips and Frito Lay chips by the few legislators is appropriate, represents exactly the type of central planning that has saddled the citizens of New York with the current deal.
Please note I am seeking nothing for myself. I am, however, available for product testing on a work at home basis. Id like to specialize in the 'Cool Ranch Dorito', with which I have some experience already. Hey..we can talk.
Thank You for your consideration,
PS: Would Frito Lay consider adding a chip branded as the Bruno if it would close the deal? Give it some thought, and Ill explain later.
cc: Ms. Indra K. Nooyi, Chairman/CEO - Pepsico, Inc.
Note that this is not an effort to strickly put forth principles, other than conscience.
Any CEO that invests his company’s funds in NY is a fool.
I think it’s a fresh idea and a crisply written proposal.
AM 810 WGY - NY Chip Plant Proposal (scroll down):