Saratoga County

Last piece in place for chip plant

The last obstacle to the start of construction on the $4.2 billion computer chip factory at the Luth

The last obstacle to the start of construction on the $4.2 billion computer chip factory at the Luther Forest Technology Campus has been cleared.

A project labor agreement has been reached between GlobalFoundries and the construction trade unions that sought work on the project, Gov. David Paterson announced Wednesday.

The factory will be one of the largest private investments ever made in the state, and Paterson and other state officials praised accomplishment of the labor deal.

“Now that this agreement is in place, we will move forward with completing the final steps needed to start the construction phase,” said GlobalFoundries spokesman Travis Bullard.

The company will be issuing the formal commitment letter to the state to receive a $650 million economic development incentive payment, purchasing the 223 acres it is buying for its plant and authorizing high-tech contractor M+W Zander to award the first contract for site preparation.

Bullard said more details on those steps will be announced early next week.

Actual construction should start in August.

GlobalFoundries is expected to spend $800 million on construction of a 1.2 million-square-foot plant, creating 1,600 construction jobs and another 2,700 construction-related jobs, according to Paterson’s office.

Malta Supervisor Paul Sausville was thrilled to learn the news.

“That was the last obstacle. From here on in, it’s construction. It’s great news,” Sausville said.

In his announcement, Paterson said the agreement between M+W Zander and the Greater Capital Region Building and Construction Trades Council AFL-CIO will be signed this week.

It establishes that union-scale wages will be paid on 93 percent of the work but doesn’t require contractors to be unionized, said Prairie Wells, a spokeswoman for the council. The remaining 7 percent of work not covered will involve highly specialized high-tech work.

“We’re really excited about this. It creates an even playing field between union and non-union contractors,” Wells said.

There are also provisions for the “Helmets to Hardhats” program to hire veterans for construction jobs, and local people get first crack at the jobs, Wells said.

The local building trade unions in return pledge not to strike or engage in other actions that would impede construction during the three- or four-year life of the project.

The parties, working through Paterson’s office, have been negotiating since early March.

Unions had argued that there should be a project labor agreement because of the $1.2 billion in economic incentives GlobalFoundries is receiving to locate in New York state.

“Bringing economic development like this not only creates jobs and leverages private investment, but it positions New York as a technology giant,” Paterson said in a statement.

Robert Mantello, president of the Greater Capital Region Building and Construction Trades Council, was directly involved in the negotiations.

“This project labor agreement is truly an accomplishment for the people of the Capital Region and the entire state, and the council intends to continue in its role as a most valued and trusted business partner for the years to come,” Mantello said.

Bullard said the agreement assures labor peace while also giving GlobalFoundries the flexibility it believes is needed in building a high-tech project.

“The agreement solidifies the company’s commitment to using a significant amount of local union labor for the construction of the Fab 2 project,” Bullard said.

The factory, which GlobalFoundries is calling Fab 2, will fabricate 22-nanometer chips, expected to be cutting-edge when it opens in 2012.

The plant is expected to have more than 1,400 permanent jobs with an average salary of $60,000 and create another 5,000 secondary jobs in the surrounding area.

Plans for the plant were first announced the state and Advanced Micro Devices in June 2006. AMD, buffeted by a number of financial setbacks in its intense competition with Intel Corp., in March spun off all of its manufacturing operations and plans to a new entity jointly owned with an Abu Dhabi investment fund, GlobalFoundries.

GlobalFoundries will sell chips to AMD, but as part of its business model, it is also free to make chips for other customers.

Political leaders praised the agreement.

“It is important that the Malta plant’s construction include skilled men and women who are paid fairly and provided with appropriate benefits for their work. If this undertaking is to create thousands of well-paying jobs and stimulate economic growth in the surrounding communities, it must start with those who will build this plant,” said state Assembly Speaker Sheldon Silver, D-Manhattan.

Those who called for guarantees that locals will be able to get some of the work were also pleased.

“It is especially gratifying to finally let our communities know that there will be local jobs for local people with the announcement of a project labor agreement,” said state Sen. Roy McDonald, R-Saratoga.

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