The Messy Reality of ‘Made in America’

From the New York Times, I'm Michael. Aubaro. This is the Daily. [music]. The construction of a massive factory in. Arizona was supposed to embody the Trump. administration's ability to bring. [music] manufacturing back to the US. Instead, as my colleague Peter Goodman. found out, it's provided [music]. companies around the world with. literally 18,000.

reasons to think twice about building in. [music] America. [music]. It's Monday, December 22nd. Peter, good of you to come into the. studio. >> Delighted. >> I wonder just to start this conversation. if you can describe. this factory that you recently visited.

to us. >> Yeah, sure. >> So, it's about 9:20 in the morning on. Friday and I'm just arriving. I mean, there's this giant, mostly empty desert. valley in the extreme north of Phoenix, as far as the eye could see. Really. emptiness. >> I'm standing on a gravel road, uh, looking at cactuses and various desert. scrub just flowing out to the horizons. that this is all going to get filled up.

with housing and and offices to feed. >> So, this factory, I've seen a lot of. factories in my day. You sure have. is. on a scale that I've never even. imagined. [music] We're talking about more than a. thousand acres. The complex itself, I'm. looking at a long, low gray building. with a bunch of smoke stacks visible on. top. You can see at least a dozen. cranes. You can hear the roar of.

something. There's black smoke now. coming out of the top of one of these. buildings. and beyond you can see these. cranes that are working and there are. construction cranes in every direction. Now I lived in Shanghai, China in the. height of the construction boom there. So I was in Dubai when Dubai was under. enormous construction and then to. [music] the west of there there's a ton. of cranes. Uh just counting real 1 2 3 4. 5 6 7 8 9 10 11 I mean I'm running out.

I' I've counted 15 of them. Uh, and. there's still more. And then there's. more visible like way beyond to the. west. That could be. >> these are the only places where I've. seen these numbers of cranes and numbers. of construction people [music] wandering. about. And that feeling of like you're. present there for a moment when things. are really changing in a [music] deep. way in that place. >> Just beyond. I see heavy equipment on. the move. I see diggers that are [music].

moving soil around. There's a whole wall. of portaotties as you would expect at a. giant construction project. I mean this. is people say [music] the biggest. construction project in North America. and I I got to say it doesn't. disappoint. >> And looking at this factory [music]. under construction evokes that sense as. well of scale. Not just scale but that. this is important beyond the thing. itself.

What does it represent? This gargantuan. cranefilled. factory bill. It represents a moment. when a consensus broke out in the. American political system, in the. business world, that globalization, this system that we've been living under.

for most of our adult lives, has been. very fruitful and beneficial in all. sorts of ways. But there are some things. where it matters where we make them. And. one of those things is computer chips. We need to have our own stock of. computer chips. We need to make them at. home in the event of war or disaster. And that's what they're making in these. factories that I saw. Computer chips are. the brains of just about everything. The.

iPhone in your hand, the data centers. that are getting built all over the. place to make artificial intelligence. work. They're going into our cars. They're going into our appliances. I. mean, it's pretty hard to think about. any manufactured product now that. doesn't have some kind of computer chip. >> So, it would seem like a very, very big. and overdue thing to have such a factory. building those chips right here in. America. >> It's a big deal. I mean, it is the most.

palpable manifestation of this really, I. think you can say, national aspiration. to build things in America again. But. there are some complications. [music]. This company that's building these. factories is not American. It's Taiwan. Semiconductor Manufacturing Corp. TSMC. as it's known. It is a Taiwanese. company. It is a very successful.

Taiwanese company. But it's also been an. excruciating pain for TSMC [music] to. get this thing built with American. subsidies, with [music] a whole. political process designed to bring this. about. It's still been slow, expensive, and difficult. [music] And so it really. raises the question, is this a triumph? Is this the template for how we can do. this [music] going forward? Or is this. the cautionary tale?

So Peter, tell us the story of this. factory and all the ways in which it. suggests a potential future or perhaps. the impracticality of that future. >> Look, you have to go back to the. pandemic, which was the great reveal. that it's not such a great idea to. concentrate nearly all of the production. of vital things in single countries. So, you know, waking up and discovering that. you really can't make a ventilator in. the middle of a pandemic unless you.

import stuff from China, >> where the pandemic was at its worst, >> where the pandemic began, a country that. not incidentally we decided to have a. trade war with, not a great way to. reliably get the stuff you need. And. computer chips, the most advanced ones, are made overwhelmingly in Taiwan. Taiwan is of course a self-governing. island that is claimed as part of. Chinese territory by the people's. republic of China and its government in.

Beijing which means that you know there. is the not zero risk that on any given. day the Chinese military could show up. and take over and that could be an. enormous disruption to the computer. chip. And in a sense, the pandemic was a. potential theoretical foretaste of what. it would be like if all of a sudden. China were to invade Taiwan cuz it. showed us what it looks like when your. global supply chains get cut off. Suddenly, we have to grapple with the. idea that maybe all those computer chips. can't ever get out of Taiwan.

>> And we have to think about resilience. We need the the way to think of it is we. need some insurance. It's not that. globalization is bad. It's that. globalization without insurance against. the risks that are an inevitable part of. life. That's not so good. >> And what does that insurance actually. look like? >> It looks like the government saying. we're going to have to play a direct. role in making sure that certain things. are built in the United States and. that's going to require subsidies. So. along comes the Biden administration and.

the Biden administration breaks from. generations of free trade dogma. This. idea that we just let the market sort. out what gets built and where. And they. say efficiency only takes us so far. The. government's going to have to play a. role in making sure that certain things. like computer chips are built in the. United States. And this becomes the. Chips and Science Act. this landmark. piece of legislation that's got tens of.

billions of dollars in subsidies given. to companies that build computer chip. factories in the United States. One of. those companies, Taiwan Semiconductor, actually participates in the writing of. this bill. >> And that company, TSMC, ends up with a. $6 billion plus grant to then build this. complex of factories in Phoenix. At the. end of the day, when it's all built, they'll be making roughly a third of all. the advanced ships they make worldwide. right there in Phoenix, Arizona. >> That's a really, really big deal given.

just how much of that work was. concentrated in Taiwan. >> It's a very big deal. It's a very big. deal for TSMC. It's a very big deal for. the United States. And it's certainly a. very big deal for the local economy in. Phoenix, which is, you know, traditionally been very tied to the boom. and bust cycle of real estate. And now. we're talking about thousands of jobs in. construction to build this, thousands. more to eventually make the chips. themselves. And then there's all sorts. of, you know, associated services,

lawyers, insurance companies, caterers, truck drivers, warehouses, >> right? A state would in theory kill for. this kind of economic activity. >> Any state would kill for this kind of. economic activity. That's right. So, on the day of the [music]. groundbreaking, this is December 2022, you've got the Republican governor of. [music] the state of Arizona. You've got. members of the Senate. You have union. representatives, university [music]. presidents.

>> Well, I tell you what, you're starting. off in the right place. This is going to. be an incredible asset to the state of. Arizona. A special thanks to. >> And finally, Joe Biden, the Democratic. president, shows up leading the parade. in celebration of this enormous triumph. in economic development. >> Your city and Gov, uh, you and I are. different sides, but we see and share. the same vision as Arizona is a hub, literally a hub for tech for technical.

change that's going to take place. And. that's well under. >> the president is associating his. administration with reclaiming the. future. >> And I know our host won't mind my. pointing out that America invented the. chip. >> He's delighted to be talking about what. a huge deal this is for the rejuvenation. of American manufacturing and in. something that's, you know, forwardlooking. This is building an. American future in a technology that the.

US actually pioneered. >> And you're here because you're seeing. what we're all seeing. America. manufacturing is back, folks. American. manufacturing is back. [applause]. >> And I know because you said so at the. beginning of our conversation, Peter, that this story is about to take a. complicated twist. But so far, it really. does feel worth saying that this is a. fable of what's possible in an American.

system that's not known for getting big. domestic manufacturing projects of any. kind done. >> Yeah. This is a real life manifestation. of what this enormous economy full of. talented skilled people. >> and political system. >> political system that doesn't always. help bring about the most fruitful. outcomes. But we got a lot of money. We. got a lot of knowhow. And if we can get. it all working right, this is what we. can produce.

>> [music]. >> And yet by the time I got out to Phoenix. about 3 years after the groundbreaking, it was still a marker of incredible. triumph. But alongside the triumph was a. [music] sense that wow what a pain it's. been to get this constructed and that. the whole complex had become symbolic.

not just of what we can achieve but also. the many ways in which American. governance can get in the way of our. visions. >> [music]. >> We'll be right back. So, Peter, after all of this promise and. achievement in the story, what starts to. go wrong with the construction of this.

set of factories after the. groundbreaking? Well, from the. beginning, it's clear that Taiwan. Semiconductor, this very successful. company that's managed to make and run. huge factories in Taiwan, is dealing. with a system that's very different than. the one that it's accustomed to. And you. know, at home in Taiwan, they're. building factories in these dedicated. science parks where there's one central. authority. There's one permit, one.

inspection, and they're done. >> How nice. >> How nice. and they're separated from, you know, homeowners who may have. different ideas about what they want to. see, what they want to live next to. Well, in Phoenix, they're dealing with. the county. They're dealing with the. municipal government. There are state. and federal environmental regulations. And so there are literally thousands of. permits that they have to get. >> Thousands. >> Thousands where it would have been one. in Taiwan. And this is all new to TSMC.

And even if an American company were. trying to do this, it would be new to. them because we, it turns out, don't. have regulations governing this. particular industry at the county in the. municipal level. >> There's no code on page 25 of the local. zoning manual that says when building a. chip factory here in the desert, this is. the lighting system. >> Correct. So TSMC actually has to write. 18,000 rules. >> Wow. that they then have to comply with.

while they're trying to figure out like, well, let's see. You've got this. federally administered clean air. program, but it's the county we actually. have to deal with to get the permit. And. they have to write the language. $18,000. rules cost them $35 million. >> just to write the rules. just to write. the rules, it turns out, >> and just to be clear, when we say that. this company is writing. these rules, they're helping write rules that will. then be drafted, adopted by local.

government. >> Correct. But this is like the frontier, right? So, they actually have to get. down into the nitty-gritty of educating. the people who are supposed to be. regulating them on what it is that. they're doing and what could go wrong. and how it needs to be done. >> What's the most intriguing rule you came. across? >> Huh? Well, at one point there was a. supplier company called Lindy that makes. air separation equipment. The the inside.

of these computer chip factories has to. have really pure air. And so they pipe. in this clean air from a neighboring. plant and just to move a mound of dirt. and then leave part of the mound in. place required 15 different permits. [laughter]. and you know more than 15 different. inspections. >> Okay, so that is the first of what I. imagine are many headaches, >> right? Then they quickly figure out that. there aren't enough people with the.

right sorts of skills to build one of. these plants. These plants have to be. built to extraordinary specificity. I. mean, it's, you know, it's kind of an. industrial magic trick to make a. computer chip. And it involves, you. know, beaming light onto tiny pieces of. silicon. It's sort of like a. photographic negative. We're talking. about fractions of a thousandth of a. percent of the width of a human hair. Things have to be just so. And in. Taiwan, there are thousands of people. who've come through an apprentice.

system, who've actually participated in. building fabs. The last time we. completed a large scale fab in the. computer chip industry in the United. States was 13 years ago. >> So we just simply don't have the muscle. memory to build one of these plants. We. can't do this without relying on places. that have this expertise and those are. places in East Asia. >> So how does the company deal with that? They start bringing in specialized.

workers from Taiwan, which immediately. causes, you know, major animosity with. local unions. And the local unions say, "Well, hold on a second. If the federal. government's writing a check for six. plus billion dollar. >> should be American jobs. >> We should be getting the job." And TSMC. says, "You will be getting thousands of. jobs, but to get this thing off and. running right now, we got to go find. some people who know how to install this. specialized, highly advanced equipment. that goes into these plants." So they. bring in people to do that.

>> So eventually the unions win some. promises that TSMC will hire a certain. number of workers and peace reigns with. the unions. But meanwhile, there's a. lawsuit filed by a bunch of American. workers who accuse TSMC of. discriminating against American workers, treating them like they're lazy and. incompetent. They accuse the Taiwanese. managers of speaking in Chinese as a way.

of excluding the American workers from. participating, >> which is probably not quite the case. They're probably speaking Chinese. because they speak Chinese. >> I mean, they that's the language that. they could speak most efficiently. So, I. mean, this was certainly something that. I heard from Taiwanese Americans who are. living in Phoenix that, you know, it's. hardly an act of discrimination that, you know, someone who's under the gun to. deliver on a complicated project that. costs billions of dollars, uh, with the. mothership breathing down their neck to. deliver, they're going to want to speak.

to people in their native language. So. on top of all the tensions about rules, there are these cultural tensions being. revealed between an international. company trying to do this hard thing and. a group of local American workers who. are chafing at all that represents. TSMC. is a highly successful company in its. own system, but now it's navigating a. different system and there's a different. set of expectations for workers. I mean,

in Taiwan, TSMC operates in a kind of. paternalistic fashion where we'll take. care of you. You'll be very well paid. We'll get involved in your housing if. need be. But when we need you in the. middle of the night, when something goes. wrong at that factory, we really don't. care what you're up to. You got to be. over there pronto. And that's. understood. People work very long hours. Construction crews work what we would. call overtime without logging as such. the American worker is operating in a. system where uh we don't have the same.

sort of faith in our employers. We don't. have the same sense of social. obligation. And so the American worker. comes at this from a much more. contractual, hey, you know, I'm supposed. to be off at 5 kind of standpoint and. you call me on the weekend, I'm home. with my kids, maybe I can't make it. And. so this creates all sorts of. misunderstandings, bad feeling from the American. standpoint. They're dealing with this. doineering, you know, controloriented.

company from the Taiwanese perspective. They're dealing with workers who aren't. fully in it for the team and aren't. working as hard as the people they're. bringing in from Taiwan. >> Mhm. And of course, we haven't even. gotten to the idea that there are. neighbors to this vast complex who no. doubt because this is the United States. have some questions and concerns. >> Right? So, I spent time looking at uh a. plant that's being built by one of. TSMC's suppliers. It's a company called.

Amcore. They do what's. >> an ancillary building nearby. >> It's a so-called packaging plant. They. take the chips that are made and they. configure them to fit into your iPhone. or your car or whatever. Well, they end. up in this um right in the middle of a. planned mixeduse community that's. supposed to mean, you know, retail, maybe some offices, walkable homes, their golf courses around, and neighbors. learn that there's this factory planned.

Uh it's going to interfere with their. views, their peace and quiet. They're. worried about water. They're worried. about tractor trailers coming through. the area. and the local uh city, they. offer these asurances that the factory. is only going to be so high. It's not. going to be that big. And then. meanwhile, because of this stunning. demand for AI chips, suddenly it's going. to be twice as high. It's going to be. four times the footprint. And. eventually, these homeowners mass. together and they successfully kill this.

plant or they at least they force Amcor. to go move to a different site. And I. think this is a moment worth unpacking. that on the one hand, if we're really. serious about having computer chips made. in the United States, we need a plant. like Amcors. On the other hand, these. homeowners didn't sign up for some sort. of national crusade in [laughter] to. advance American manufacturing. Most of. these people are retirees. They they. just want a peaceful place to live and. enjoy and watch the sunset and play. golf, right? So it's worth coming back.

to this point that in Taiwan these two. groups would be separated by vast. distances. It's uniquely in the American. system and some people would call these. guys nimies. Others would say it's. absurd that government didn't plan this. better so that there is no collision of. interest. It's a bunch of retirees who. want to look at cactuses should be able. to do that at the same time that we're.

figuring out where else in this giant. state of Arizona could there be a piece. of land big enough to have this factory. In the course of reporting on all of. these disputes and tensions, >> I'm curious where you found your. sympathies lying. Is it with a company. that says, "Look, we're just trying to. fulfill America's. pledge to have insurance against the. worst case scenarios. We're just trying. to build a factory in the US that makes. sure you have access to chips. We have.

access to our clients." Did you find. yourself instead more drawn to these. American folks who said, "Wait a minute, these should be American jobs, or we did. not sign up for this building in our. community." Well, I think part of the. complexity of this is that pretty much. everybody at the table has a reasonable. argument to make. We live in a. democracy. Uh people who buy homes in a. planned community expecting that maybe a. Starbucks will pop up um and not a.

factory should have a say over what gets. built in their midst. And uh in a place. where uh it it's a desert. It's. literally a desert and you're worried. about shortages of water and there's. already great battles over who gets. access to the Colorado River and the. depletion of the watershed in areas. There should be a process to figure out, you know, what are the impacts and and a. lot of these permits are uh permits. under programs that represent triumphs.

of American democracy. We have advanced. workplace safety. We have advanced. environmental protection. It's just that. this bureaucracy has now grown up around. some of these laws without us sorting. out these naughty land use questions. And I think one can be sympathetic to. the argument that we have to think. seriously about our national security, our industrial future, and that's going. to require a government role. But that's. got to be done in a thoughtful, deliberative way, and we got a lot of.

catchup to do in that area. So I think Peter this brings us to the. most important and most existential. question of all to emerge from this. reporting you did which is did all of. the rigomeroll involved in getting this. project complete did it make this a. template for the reestablishment of. manufacturing in the United States at a. massive scale or does it loom as the.

cautionary tale for why it's just too. hard to do this in the US that would. send similar companies and perhaps those. not getting a multi-billion dollar check. from the US government running in the. other direction. >> Yeah, it's a great question. Um I would. say kids don't try this at home. [laughter] Um I mean in like in all. seriousness we are tempted to look at. this and say of course at the beginning. it's going to be messy. It's going to be. tricky. We'll get better at this.

>> This is the messy beginning. >> Yeah, it's the messy beginning. And. that, you know, we'll look back in 25. years and say, "Yeah, you know, that was. tough, but boy, we really got through. that. We really got something in this. template.". >> But, you know, let's remember Taiwan. Semiconductor is now promising to invest. $165. billion. There aren't a lot of companies. that can throw around that sort of. money. This is a highly successful. company. It is by any measure the global. industry leader. And they had a tough. time of it. uh they've said that they've.

learned a lot and they're in a position. to go faster now and there's reason to. think that that's so but this is. certainly not something where just any. other company in any other place could. come along and summon out of nowhere. >> right and if it's this hard for the most. successful maker of computer chips in. the world. >> right. >> how hard will it be dot dot dot for. anybody else. >> correct and that message is out there. that the US is a tough place to do.

business. It's a tough place to get. permits. It's a tough place to find. people you need to do the stuff that. needs to be done and you're going to. have to pay them a lot uh to do it. This. is not for the faint of heart. [music]. So, if we're trying to figure out. whether this project is going to send. the signal to investors and other. companies around the globe that, hey, the US is open for business. Come build. a factory. it's gonna be awesome. This.

is not that story. This is a story that. says it's possible. And if the. government writes you a check and gives. you concier service, which is what TSMC. has gotten, then maybe everything comes. together and makes it possible. But this. is not the thing that will convince. anyone that it's going to be really easy. to build a factory in the United States. If you're in an industry where you're. not being forced essentially to build a.

plant in the United States, there's a. good chance you'd look at this. experience and say, "Maybe we'll find. somewhere else to put our next factory.". [music]. >> Peter, [music]. thank you very much. We appreciate it. >> Thank you, Michael. [music]. We'll be right back.

[music]. Here's what else you need to know today. On Sunday, [music] the Trump. administration defended its decision to. remove more than a dozen photos related. to Jeffrey Epstein from a government. website just hours [music] after. thousands of files had been released to. the public on Friday evening. The official, Deputy Attorney General. Todd Blanch, said that [music] the. photos, including one featuring. President Trump, had been removed to. address complaints from [music].

Epstein's victims, not to protect. President Trump. >> We are not redacting information around. President Trump, around any other. individual involved with Mr. Epstein. And and that narrative, which is not. based on fact at all, is completely. false. And over the weekend, [music] the. United States Coast Guard stopped and. boarded a tanker carrying [music]. Venezuelan oil, its second such. interception in the past month. The.

Coast Guard is currently pursuing yet. another tanker linked to [music]. Venezuela, whose crew had refused to let. American guardsmen board [music] the. vessel. It's all part of a growing. pressure campaign against the Venezuelan. leader Nicholas Maduro [music]. that has increasingly been focused on. oil. [music]. Today's episode was produced by [music]. Shannon Lynn and Mary Wilson with help.

from AA Churby. [music] It was edited by. Mark George with help from Devon Taylor. contains music [music] by Alyssa Moxley, Alicia Baub, Pat McCusker, and Dan. Powell, and was engineered by Alyssa. [music] Moxley. [music]. [music] That's it for the Daily. I'm.

Michael Boro. See you tomorrow.