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Intel grounds employee air shuttle to save costs

hist78

Well-known member
"Intel has stopped flying its employee air shuttle, which operated frequent flights between the chipmaker’s sites in Hillsboro, Silicon Valley and Arizona.

“We temporarily paused our shuttle service as we reduce employee travel as part of our ongoing cost-cutting efforts and are asking employees to use commercial flights for approved travel during this time,” spokesperson Eleonora Akopyan confirmed in an email to The Oregonian/OregonLive."

"The Port of Portland, which runs the Hillsboro Airport, said that Intel has recently been operating eight flights a day. Before the pandemic, the shuttle flew 13 times daily from Monday through Thursday with 11 flights on Fridays.".


Source: https://www.oregonlive.com/silicon-...ounds-employee-air-shuttle-to-save-costs.html
 
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Intel's management can allow such expensive practice to exist for so many years is a telltale sign of Intel's culture and high cost manufacturing.
 
While Morris Chang
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Intel's management can allow such expensive practice to exist for so many years is a telltale sign of Intel's culture and high cost manufacturing.
I disagree. The Shuttle is a huge time saver. I had teams distributed in Hillsboro, Santa Clara, DuPont, and Chandler, and the Shuttle made teamwork much more effective and encouraged face to face teamwork. Have you tried to make a 7:00am flight out of PDX when you live in Hillsboro for a day trip? Portland traffic was and is a mess.
 
I disagree. The Shuttle is a huge time saver. I had teams distributed in Hillsboro, Santa Clara, DuPont, and Chandler, and the Shuttle made teamwork much more effective and encouraged face to face teamwork. Have you tried to make a 7:00am flight out of PDX when you live in Hillsboro for a day trip? Portland traffic was and is a mess.

Have you ever taken those flights? Normally how many passengers did they carry?
 
The Intel shuttle was different, in one interesting way. You could take it as a technician or engineer, it wasn’t just for the C-suite.

Lots of cost rationalization ahead for Intel.
 
Have you ever taken those flights? Normally how many passengers did they carry?
Of course. Countless flights. The most recent jets are apparently the same as I remember from several years ago, Embraer ERJ-145s, which carry about 50 passengers in a very utilitarian configuration. The seats were comfortable enough for the Hillsboro to San Jose flights, but I found them lacking in comfort for the Hillsboro to Chandler flight. Not luxurious at all, more like a long-distance commercial coach bus. Current employees tell me nothing has changed. The flights were always full, and there was a lot of competition to get seats, because the time savings was huge. The Hillsboro airport was down the street from the Jones Farm facility. Flying into San Jose you arrive in the private flight terminal, and you're in a shuttle bus to HQ or a rental car in minutes after deplaning. In Chandler it was a small airport, not Sky Harbor. Back when I worked at Intel there was a turboprop flight from Hillsboro to Dupont, which I think seated about 20 people. Given the weather in the Pacific Northwest, and that the turboprops flew at about 20,000 feet, sometimes the flights were a bit exciting in the winter.

As for Morris in Taiwan, I was just reading Taiwan is comparable in size Maryland and Delaware combined. Of course you'd use ground transportation in such a tiny place. That a guy worth $2.5B takes a bus is his business. You would think he'd have a private car and a driver at about 90 years old for convenience and security, but I couldn't care less.
 
I disagree. The Shuttle is a huge time saver. I had teams distributed in Hillsboro, Santa Clara, DuPont, and Chandler, and the Shuttle made teamwork much more effective and encouraged face to face teamwork. Have you tried to make a 7:00am flight out of PDX when you live in Hillsboro for a day trip? Portland traffic was and is a mess.
Nothing you've said in you very helpful comments suggests that this Shuttle was (or perhaps need have been) particularly high cost. Would you consider this a real cost saving or a symbolic gesture ? Or perhaps the new policy simply requires greater signoff admin and friction and is easier to restrict ?
 
Nothing you've said in you very helpful comments suggests that this Shuttle was (or perhaps need have been) particularly high cost. Would you consider this a real cost saving or a symbolic gesture ? Or perhaps the new policy simply requires greater signoff admin and friction and is easier to restrict ?
I don't know enough about aircraft operations and maintenance to say much of any value. An internet search tells me the planes have a list price of about $2.5M each, and aircraft manufacturers are notorious discounters, so that's not where the big expenses are. Pilots, aircraft maintenance, and hanger space are expensive, and then there's jet fuel. My uneducated sense is that cutting the shuttle flights for months is more than a gesture, and it might be that commercial tickets with a corporate discount are significantly cheaper than the fully loaded cost of shuttle seats.

Interesting but irrelevant sidebar, Phil Knight of Nike had a custom hanger built at the Hillsboro airport for his pair of Gulfstreams:


 
I disagree. The Shuttle is a huge time saver. I had teams distributed in Hillsboro, Santa Clara, DuPont, and Chandler, and the Shuttle made teamwork much more effective and encouraged face to face teamwork. Have you tried to make a 7:00am flight out of PDX when you live in Hillsboro for a day trip? Portland traffic was and is a mess.

Yes, it will certainly save time but at what amount of cost and benefits in terms of productivity and money?

Most video conferencing and remote group collaboration technologies have been widely adopted long before the pandemic by many large and small companies. On the other hand Intel was so used to this air shuttle service for so long at such a large scale. Is it a nice to have feature or a must to have corporate operation? Can Intel scale it down to a level that every trip using its private jets is must and necessary?

If this is a must to have operation then stopping this air shuttle service will hurt Intel productivity greatly. If not, then Intel should have cut this service or scale down this service long time ago.

According to FAA registration, Intel owns/operates six Embraer ERJ-145 series airplanes and each can carry 50+ passengers. Intel Air Shuttle Service probably provided at least 2000 to 3000 flights (or takeoffs) per year. It's operating like a small regional airlines. Does it make sense for a semiconductor company?

Under Intel IDM 2.0 strategy and the very challenging market condition, Intel's cost structure must be extremely competitive against AMD, Nvidia, Qualcomm, Mediatek, TSMC, UMC, Globalfoundries, or even Amazon, Google, and Microsoft for their internal semiconductor business. For example we can't simply say we don't care much about TSMC doesn't need air shuttle service because Taiwan is a small island and Intel doesn't need to worry about the additional cost of operating a private airlines. Every spending will eventually add to Intel overall cost and impact intel's competitiveness. Intel current leadership rightfully recognized it.

BTW, Intel Air Shuttle Service's call sign is "HIGHTECH"
 
Of course. Countless flights. The most recent jets are apparently the same as I remember from several years ago, Embraer ERJ-145s, which carry about 50 passengers in a very utilitarian configuration. The seats were comfortable enough for the Hillsboro to San Jose flights, but I found them lacking in comfort for the Hillsboro to Chandler flight. Not luxurious at all, more like a long-distance commercial coach bus. Current employees tell me nothing has changed. The flights were always full, and there was a lot of competition to get seats, because the time savings was huge. The Hillsboro airport was down the street from the Jones Farm facility. Flying into San Jose you arrive in the private flight terminal, and you're in a shuttle bus to HQ or a rental car in minutes after deplaning. In Chandler it was a small airport, not Sky Harbor. Back when I worked at Intel there was a turboprop flight from Hillsboro to Dupont, which I think seated about 20 people. Given the weather in the Pacific Northwest, and that the turboprops flew at about 20,000 feet, sometimes the flights were a bit exciting in the winter.

As for Morris in Taiwan, I was just reading Taiwan is comparable in size Maryland and Delaware combined. Of course you'd use ground transportation in such a tiny place. That a guy worth $2.5B takes a bus is his business. You would think he'd have a private car and a driver at about 90 years old for convenience and security, but I couldn't care less.

Intel is not a quasi monopoly anymore. Intel's shrinking revenue, shrinking profit, and shrinking free cash flow require Intel to be conscious about how its competitors spend and operate.
 
How about using telephone technology (or slack) with 2 people on the phone, sometimes 3? How about avoiding synchronized meetings and calling the other person when you need to have an answer? Meeting goers...
 
Yes, it will certainly save time but at what amount of cost and benefits in terms of productivity and money?

Most video conferencing and remote group collaboration technologies have been widely adopted long before the pandemic by many large and small companies. On the other hand Intel was so used to this air shuttle service for so long at such a large scale. Is it a nice to have feature or a must to have corporate operation? Can Intel scale it down to a level that every trip using its private jets is must and necessary?
Personally, I despise Zoom. For 1x1 meetings just the phone is fine. For anything bigger Zoom is just a technological PITA, IMO. Slack channels are awesome for background or non-urgent discussions and getting questions answered, and I wish it was there 25 years ago. It could have been, since the way it works is not much more complicated than vBulletin (internet forum software).

For large-scale chip and software design discussions, where multiple people have significant responsibilities for designs being formulated or problems worked out during development, nothing beats face to face meetings with whiteboards. The information exchange bandwidth is exponentially higher than Zoom or Slack, or mere phone calls. As for some trips being unnecessary, some people are unnecessary, and that's a far bigger and more expensive problem for every company. I can't speak for the current Intel, but the worst wastes of time ever in multiple big companies I working for were big (10+ participant) senior status meetings with a basically non-technical executive being the decision-maker and running the meeting, and everyone just sitting there while someone presented their data. Most participants were just sitting there typing on their laptops on a conference call on mute waiting their turn. (Zoom makes these meetings even worse, because everyone can see how rude you are by not really paying attention while other people are presenting.) Meetings like that waste far more resources in a company like Intel than several shuttle organizations would. You're fixated on a corporate function that is relatively small in the grand scheme of a company with over 100,000 employees.
If this is a must to have operation then stopping this air shuttle service will hurt Intel productivity greatly. If not, then Intel should have cut this service or scale down this service long time ago.
In my opinion it will hurt productivity, since distributed development teams are the norm at Intel.
According to FAA registration, Intel owns/operates six Embraer ERJ-145 series airplanes and each can carry 50+ passengers. Intel Air Shuttle Service probably provided at least 2000 to 3000 flights (or takeoffs) per year. It's operating like a small regional airlines. Does it make sense for a semiconductor company?
I already posted the aircraft type and seating capacity. I don't know how many flights there were per year, but with so few planes it's not many. How many semiconductor companies involved in every aspect of design and manufacturing of multi-billion gate chips are there? You know the answer...
Under Intel IDM 2.0 strategy and the very challenging market condition, Intel's cost structure must be extremely competitive against AMD, Nvidia, Qualcomm, Mediatek, TSMC, UMC, Globalfoundries, or even Amazon, Google, and Microsoft for their internal semiconductor business. For example we can't simply say we don't care much about TSMC doesn't need air shuttle service because Taiwan is a small island and Intel doesn't need to worry about the additional cost of operating a private airlines. Every spending will eventually add to Intel overall cost and impact intel's competitiveness. Intel current leadership rightfully recognized it.
Amazon, Google, and Microsoft sell software and services, and their gross margins are higher than hardware companies. Do you know how many chips Amazon, Google, and Microsoft have in process at any given time, and how many Intel does? I think you'll find the difference is about an order of magnitude.

I agree that Intel's fabs and IFS have to be cost competitive, one way or another, with TSMC and GF.
 
How about using telephone technology (or slack) with 2 people on the phone, sometimes 3? How about avoiding synchronized meetings and calling the other person when you need to have an answer? Meeting goers...
Have you ever worked on a software or chip design team with over 10 people in key product design roles? Or perhaps 30? If you did, how did you maintain design alignment across the team? The hub and spoke model is inefficient and breaks down quickly.
 
I have attended many corporate meetings with my laptop not paying attention to unrelatated topics prior to starting my own company.

In my company, the largest employee count I ever had was 28 people, of which 24 were senior programmers in a completely flat organization (I don't believe in more than 2 levels of management. Many had INTJ personalities. The I and J forced me to make many 3 way phone calls to push discussions. The phone calls were almost always less than 15 minutes. The starting and ending times were up to the employeees to pick times that avoided sitting in traffic. The hours of my walk around manager (me) was 6am to 7pm. Dead wood didn't last long.
 
Personally, I despise Zoom. For 1x1 meetings just the phone is fine. For anything bigger Zoom is just a technological PITA, IMO. Slack channels are awesome for background or non-urgent discussions and getting questions answered, and I wish it was there 25 years ago. It could have been, since the way it works is not much more complicated than vBulletin (internet forum software).

For large-scale chip and software design discussions, where multiple people have significant responsibilities for designs being formulated or problems worked out during development, nothing beats face to face meetings with whiteboards. The information exchange bandwidth is exponentially higher than Zoom or Slack, or mere phone calls. As for some trips being unnecessary, some people are unnecessary, and that's a far bigger and more expensive problem for every company. I can't speak for the current Intel, but the worst wastes of time ever in multiple big companies I working for were big (10+ participant) senior status meetings with a basically non-technical executive being the decision-maker and running the meeting, and everyone just sitting there while someone presented their data. Most participants were just sitting there typing on their laptops on a conference call on mute waiting their turn. (Zoom makes these meetings even worse, because everyone can see how rude you are by not really paying attention while other people are presenting.) Meetings like that waste far more resources in a company like Intel than several shuttle organizations would. You're fixated on a corporate function that is relatively small in the grand scheme of a company with over 100,000 employees.

In my opinion it will hurt productivity, since distributed development teams are the norm at Intel.

I already posted the aircraft type and seating capacity. I don't know how many flights there were per year, but with so few planes it's not many. How many semiconductor companies involved in every aspect of design and manufacturing of multi-billion gate chips are there? You know the answer...

Amazon, Google, and Microsoft sell software and services, and their gross margins are higher than hardware companies. Do you know how many chips Amazon, Google, and Microsoft have in process at any given time, and how many Intel does? I think you'll find the difference is about an order of magnitude.

I agree that Intel's fabs and IFS have to be cost competitive, one way or another, with TSMC and GF.

"Amazon, Google, and Microsoft sell software and services, and their gross margins are higher than hardware companies. Do you know how many chips Amazon, Google, and Microsoft have in process at any given time, and how many Intel does? I think you'll find the difference is about an order of magnitude."

We all know Intel has a lot great and complicated products. But when the leadership at Amazon, Google, and Microsoft are debating to use a chip designed in-house and manufactured by TSMC OR a chip with similar function designed and manufactured by Intel, they probably care more about the features, cost, performance, capacity, delivery schedule, uniqueness and competitive advantages. They probably has little interest to pay sympathy to how complicated or how difficult those other unrelated Intel products.

There are many multi-state or multi-nation semiconductor companies who are making equally good or better profit or products than Intel does. They found ways to achieve that without owning a private airlines as Intel does. Intel must improve itself and take the challenges because the market will move forward with or without Intel.
 
"Amazon, Google, and Microsoft sell software and services, and their gross margins are higher than hardware companies. Do you know how many chips Amazon, Google, and Microsoft have in process at any given time, and how many Intel does? I think you'll find the difference is about an order of magnitude."

We all know Intel has a lot great and complicated products. But when the leadership at Amazon, Google, and Microsoft are debating to use a chip designed in-house and manufactured by TSMC OR a chip with similar function designed and manufactured by Intel, they probably care more about the features, cost, performance, capacity, delivery schedule, uniqueness and competitive advantages. They probably has little interest to pay sympathy to how complicated or how difficult those other unrelated Intel products.

There are many multi-state or multi-nation semiconductor companies who are making equally good or better profit or products than Intel does. They found ways to achieve that without owning a private airlines as Intel does. Intel must improve itself and take the challenges because the market will move forward with or without Intel.
Your posts are usually pretty good, but you're obsessed with a few jets in this case. The expense is so small it doesn't even show as a line item on the annual report. You're focusing on the fuzz and not the peach. Strikes me as weird.

As for Amazon and Google doing their own chips (Microsoft hasn't deployed anything but FPGA designs yet), I've been posting that cloud company designs fab'd at foundries are on an increasing trend line. That's why I'm agreement with Intel's IFS initiative, though all of the cloud companies still buy a lot of merchant chips.
 
I don't think Intel owns the aircraft or the crew. I believe they are contractors (or at least they were before). So it's similar to leasing a car or calling an Uber, you pay for use. As described above, these are not "private jets" or even "corporate jets". In fact there is nothing luxury about it. And they are not just for "cushy" C-suites or executives. Many working level engineers taking the flights. A company of that size and that many locations, it's a given that 99.9999% of the meetings are already online and virtual. But until someone invent a virtually meeting software that is exactly same as in-person, airplane will not go obsolete. I doubt the per head operating cost is much different than the commercial flights. You also save all the ground transportation costs by sharing big buses when you arrive. The time saving is tremendous and easily pays for any extra cost. You arrive fresh and ready for vigorous meetings and work schedule, rather than already worn out after a day of airport security lines and rental cars and bad traffic.
 
I don't think Intel owns the aircraft or the crew. I believe they are contractors (or at least they were before). So it's similar to leasing a car or calling an Uber, you pay for use. As described above, these are not "private jets" or even "corporate jets". In fact there is nothing luxury about it. And they are not just for "cushy" C-suites or executives. Many working level engineers taking the flights. A company of that size and that many locations, it's a given that 99.9999% of the meetings are already online and virtual. But until someone invent a virtually meeting software that is exactly same as in-person, airplane will not go obsolete. I doubt the per head operating cost is much different than the commercial flights. You also save all the ground transportation costs by sharing big buses when you arrive. The time saving is tremendous and easily pays for any extra cost. You arrive fresh and ready for vigorous meetings and work schedule, rather than already worn out after a day of airport security lines and rental cars and bad traffic.
This is how I assumed it worked. So it's a "virtual private airline" rather than a real one. I heard that some big multinationals (like oil companies) used in the past to run their own worldwide telecoms - including all the physical infrastructure ! No one would do that now - you can just lease the capacity and have a virtual corporate network.
 
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