Industrial Policy Works

Exhibit A is long-depressed upstate New York.

by

Thanks to federal and state industrial-policy initiatives, upstate New York is emerging as a center of advanced semiconductor and wind-turbine manufacturing, and much of it will be unionized. The latest breakthrough is a joint announcement last week by General Electric and the Communications Workers of America (CWA) and its industrial affiliate, the International Union of Electrical Workers (IUE), of a labor peace agreement, intended to make GE the winning bidder on a long-sought wind-turbine blade and nacelle assembly complex at the Hudson River upstate port of Coeymans, and to give the union the opportunity to organize the workers without employer interference.

Because wind-turbine blades are so large, most manufacturing facilities are located in or near coastal ports. The Coeymans location was chosen because it’s possible to float the blades down the Hudson River.

GE and the IUE-CWA, in a joint statement, announced that the new plant will create a total of more than 3,000 jobs: 870 direct manufacturing jobs, over 1,000 construction jobs, and another 1,400 indirect jobs. Since GE’s relations with its unions have long been fraught, the labor peace agreement is a breakthrough. It commits GE to neutrality during the expected organizing drive, virtually assuring that the new facilities will be unionized from the start.

More from Robert Kuttner

Carl Kennebrew, president of IUE-CWA, described it as a “forward-looking, historic agreement.” GE Vernova president Scott Strazik also praised the labor peace agreement while singling out the union by name. Vernova is the name of GE’s power division, to be split into a separate company next year.

The terms of President Biden’s industrial-policy initiatives, which give extra credit to projects with labor peace agreements, deserve a major shout-out for promoting not just domestic tech production but unionized production.

Before the project happens, however, GE first needs to win its bid for a contract with New York state’s energy agency, NYSERDA, which is seeking capacity that totals 4.6 gigawatts of offshore wind. Likely bidding against GE will be Denmark-based Vestas, and possibly the German firm Siemens. The labor peace agreement should give GE-Vernova a leg up, even before you get to the fact that it’s a domestic firm.

This is an example of how union participation can be beneficial to companies vying for federal funding. That flips the usual dynamic, where companies resist union cooperation, and in its place a mutual agreement becomes actually necessary for the company’s progress. Unions are seen as a partner and an assistant rather than a rival.

Another major advanced tech initiative in upstate New York is the new $100 billion Micron semiconductor plant near Syracuse, which will create tens of thousands of good jobs. In announcing the initial $20 billion investment, Micron CEO Sanjay Mehrotra explicitly credited the CHIPS and Science Act, which Biden signed into law last August, as being directly responsible for Micron’s investment. “There is no doubt that without the CHIPS Act, we would not be here today,” Mehrotra gushed. It’s important to note, however, that unionizing semiconductor manufacturing, an industry that has long resisted organized labor, will be a heavier lift than unionizing its construction.

Micron was just targeted by the Chinese government in a tit-for-tat move to retaliate against U.S. efforts announced last October to keep the most advanced U.S.-produced semiconductors and chipmaking equipment out of Chinese hands. In a quickie “investigation” of the Boise-based company, Micron’s chips, which are used for memory storage, were deemed to pose “relatively serious cybersecurity problems.”

Micron does not sell its most advanced chips to China, which represents about 10 percent of the company’s sales. Micron was a handy target because Micron’s chips are the kind that China will be able to replace relatively soon with either domestic production or purchases from other countries like South Korea.

By contrast, the chips to be produced in Micron’s new facility outside Syracuse will be more advanced. Chips will remain a global industry and Micron will continue exporting elsewhere, though the China conflict is one more reminder of the importance of creating a top-to-bottom domestic tech industry.

New York state government also deserves some credit for the revival of upstate New York as a center of advanced manufacturing. A succession of governors from both parties, from Nelson Rockefeller to Kathy Hochul, have worked with the state legislature and local officials to make the capital region around Albany a center of research and development in nanotechnology to attract industry. The state also sponsors a Green Chips program, with $10 billion in economic incentives, as a companion to the federal CHIPS program.

Industrial policy works. It works even better when it leads to union jobs and a stronger labor movement.

A second Trump administration will cement a right-wing majority on the Supreme Court for a generation, and put our collective future in the hands of someone who will be virtually unchecked by our institutions. The country has shifted rightward, and the reverberations will ensue for potentially the next few decades. In this climate, a robust independent media ecosystem will be more important than ever. We're committed to bringing you the latest news on how Trump's agenda will actually affect the American people, shining a light on the stories corporate media overlooks and keeping the public informed about how power really works in this country.

Quality journalism is expensive to produce, and we don't have corporate backers to rely on to fund what we do. Everything we do is thanks to our incredible community of readers, who chip in a few dollars at a time to make our work possible. Any amount you give today will help us continue reporting on what matters to our democracy.

You can help power this newsroom by making a one-time donation or by becoming a member today.