T.J. Rodgers: It's all about what's best for business

Unlike your garden-variety Silicon Valley chief executive, Cypress Semiconductor's T.J. Rodgers is not shy about speaking his mind as an equal-opportunity critic.

Over the years, this plain-spoken entrepreneur has publicly skewered sundry political and industry figures he believes to be peddling humbug -- and that includes lobbing verbal bombshells in the direction of both major political parties. Along the way, he's taken on the likes of Jesse Jackson, Bill Clinton and Larry Ellison.

For his day job, Rodgers is the founding chief executive of Cypress, which manufactures more than 400 types of integrated circuits, with an emphasis on products useful in communications applications. Included in its product line are microprocessor clocks, embedded controllers, static RAM modules and USB chips. The company reported $254.4m in revenue for the first quarter of 2004, with $26.5m in profits.

CNET News.com recently caught up with Rodgers to get his take on the controversies over the expensing of stock options, offshore outsourcing and the business climate in California for technology companies.

Q: John Kerry is denouncing "Benedict Arnold" chief executives who send jobs overseas. Is it moral for American companies to increase their overseas outsourcing?
A: It is immoral for any chief executive not to run his company in the best possible financial way for his shareholders. I used to hold Kerry's naive view of the "all American" company, meaning all jobs in America. That was a foolish mistake on my part, and it cost my shareholders a lot of money, until I moved our entire assembly and test operation and several hundred jobs offshore in 1992.

You're talking about your Philippines operation?
Yes. To me, it's simply wrong to trash the retirement funds and the college funds of my shareholders so that I can wave the American flag and talk about keeping jobs in America. We do make all of our chips in America, because it's the right thing to do. Americans are good at that. A great majority of our engineers are in the United States also, because they're the best engineers we can find.

Do you do your chip manufacturing domestically because of worries about intellectual property?
No. Our engineers are chosen on merit, period. And we therefore have a mixture of design engineers who are two-thirds American and one-third offshore. A stronger driving force is serving customers. You need to have designers in every market in the world you serve so that they can make the stuff those customers want. There are local differences.

Some AFL-CIO activists are pledging to make the offshoring of technology jobs a campaign issue this autumn.
The AFL-CIO has been promoting losing economics causes for years. Other than the government members of the union, the AFL-CIO has lost pretty much all of its membership over the last few decades. The AFL-CIO consistently promotes economic policies that harm its own members.

By that you mean lobbying for short-term benefits at the expense of creating long-term problems?
Yes. Exactly.

You want to eliminate corporate welfare, including for the high-technology industry. In 1999, you told Congress the way to do it was simple: put all pork-barrel projects in a single package, and hold an up-or-down vote. Everyone ignored you.
They're not serious at all about eliminating corporate welfare. It's one of the most sacred parts of our government system. The Democrats also accuse the Republicans of cosying up to business. I made my first call to eliminate corporate welfare to the then-new Clinton administration. And I was never treated with more hostility than by Congresswoman Anna Eshoo, a Democrat from California, and Democrat Herbert Klein from New Jersey. Both of them were condescending and insulting -- beyond just disagreeing with me. Corporate welfare is a sacred cow for the Democrats as well as the Republicans.

Why do so many people living in Silicon Valley seem to support Democrats, even when they are the more regulatory of the two major parties? In Palo Alto, Mountain View and San Jose, there are two registered Democrats for every Republican.
Two big influences are Stanford University and the University of California at Berkeley, both of which are institutions that pour out very liberal graduates into our society. A second point is that it's not always true that we vote liberal. Ronald Reagan was our governor and a very good one.

What's your opinion of Arnold Schwarzenegger?
I think his $15bn bond offering is really screwed up. But I think that he's trying to do a good job, and I think he's honest.

Are you planning to vote for President Bush in November?
I haven't heard what John Kerry's got to say. I've read a lot of ugly stuff about him. I don't follow campaigns. I don't give money to them, I don't listen to them -- they're a waste of time. Ordinarily, it would be a knee-jerk reaction for me to vote for an incumbent Republican, but Bush has done a bad enough job that I'll look at all the candidates and make a decision.