Finance officials call Intel's grant request 'scandalous'
"Intel's latest request for a grant, which would have the country investing $1 million for every new worker, is scandalous," a Finance Ministry source recently declared. "There's no chance the Finance Ministry will approve the grant."
That said, past government grants that Intel has received turned out to be worthwhile for the country, including the most recent grant, which came out to NIS 1 million per worker - note that's shekels, not dollars - officials said. Beyond those directly employed by Intel, the company indirectly creates jobs for thousands more.
This time around, Intel requested a $400 million government grant to be used toward a $2.7 billion investment in upgrading its Kiryat Gat chip-making factory. In exchange, the company offered to hire another 400 workers - meaning the grant would come out to $1 million per new employee.
The government uses the ratio of grant size to number of new employees as one measure of whether an investment will be worthwhile. The Industry, Trade and Labor Ministry is currently evaluating whether Intel's request is economically beneficial as well.
However, the Finance Ministry already has made up its mind - it objects to the grant. Therefore, the final decision will most likely be made by Prime Minister Benjamin Netanyahu.
Government sources have informed Intel that, as a condition for approving the latest request, it must commit to manufacturing its next two generations of computer chips at the Kiryat Gat factory - at a minimum.
The government has an interest in encouraging Intel to stay. There's a consensus that the company's presence in Israel is good for the country's image as an innovative, advanced society. However, that does not mean it will approve the latest grant request.