Someone works for a company that does lots of demolition around Allentown. They recently tore down a building that Agere just spent a large amount ($35m was the number quoted) renovating. No one ever used the building. They were throwing away brand new furnture and computers.
Ok, so we go to Google, and find this article from the Allentown Morning Call. The interesting bit here is the new building. Back to Google.
A Lucent press release (they hadn't spun off Agere yet) suggests Breinigsville got a new building for $28m. That's certainly a similar number. And the time frame is right: building started in 2000, and by the time the occupancy date would have rolled around, the bottom fell out of the tech sector. Well, how about a picture of the buildings?
A semiconductor publication has a picture of the plant captioned with the name of the new owner (gleaned from the Morning Call article). The building in the foreground looks like it's 3 stories, and the ground is scarred. Plus, the parking lots in that corner are new. Terraserver shows what the complex looked like in 1999: the near building in the previous photo is new, as is the far building. So I'll guess either one of those is now gone, or the scarred area in the photo had the other building the press release mentioned on it.
Why does all this matter? Really, I suppose it doesn't. It hadn't occurred to me that there were a lot of tech sector jobs in the Lehigh Valley, and I guess now there aren't as many. Why here? Why is a company like Agere in Allentown at all? It goes back to the pre-breakup AT&T. Western Electric made equipment for homes, for central offices, for long distance, and for the government. They had a facility near Reading since around 1950. The Allentown and Breinigsville facilties came later, the latter apparently after the AT&T breakup.
All this combines to offer plenty for me to be depressed about.
1) The chip industry in PA now has the same problem steel did: it didn't keep up with changing technology. Traditional steel mills died when they failed to upgrade to more efficient processes. These chip plants lost when they didn't keep up with current wafer sizes. The employees, many of whom were no doubt in non-skilled or semi-skilled positions, pay the price for their union and corporate leadership not upgrading the plant. Now, what jobs are left were moved to Orlando in the case of the segment Agere kept, and will be moving to Texas and Mexico for the segment they sold to Tri-Quint.
2) I'm still doubting the value of the AT&T breakup. Increased competition hasn't resulted in drastically lower land line pricing. Cellular would no doubt have happened outside just AT&T, resulting in competition in that sector, and large sums of money wouldn't have been spent on breaking up and rejoining bits of what used to be AT&T, and those businesses competing with each other. I don't buy the technology upgrade argument either. Verizon can't provide me DSL, so if AT&T wouldn't have upgraded either due to being an "entrenched monopoly" (assuming the worst) life would be the same: I'm rather unsympathetic to the argument. The big flaw here is that in 1980 there was Bell Labs, and they did a good bit of basic research. Some of it had no likely product applicability in the near future. Then the breakup, and we got Bell Labs, and Bellcore. Bellcore became Telcordia, I think. Bell Labs, well, when AT&T spun off Lucent, we got Bell Labs and AT&T Labs, or something like that. 3 labs where once we had one, and none with a pool of "excess" money to throw at basic research. Who knows what innovations we lost because of it?
3) If in 2000 Lucent was using 3 facilities and looking to upgrade all of them, and in 2001 Agere was failing to realize the result of a $38m investment in a new building, and looking at shuttering the obsolete operations Lucent was using as apparently "state of the art" just the year before, what hope is there for the future? How does one so drastically overestimate future demand? What happens to the people who get sucked along with you because they were working there, not necessarily getting rich, but at least getting by?
In all a lot to be depressed about triggered by a single flippant Zephyr.