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T.J. Rodgers' testimony, Derail Measure A, It's a Loser | Cypress Semiconductor

T.J. Rodgers' testimony, Derail Measure A, It's a Loser

Last Updated: 
Sep 03, 2009


By T. J. Rodgers
President and CEO
Cypress Semiconductor Corporation

The scene: An entrepreneur addressing venture capitalists. The pitch: "This product had 12.6% share of market at its peak in 1960. Every year after that, market share dropped, with the 1995 figure at 3.5%, despite a cumulative investment of $350 billion in the product. I am here to request yet another investment of $3.8 billion."

Absurd? Not at all. The product is public transportation. And ballot Measure A, specifically. Since 1960, federal, state, and local governments have invested over $350 billion in public transportation-enough money to duplicate the entire interstate highway system-while the percentage of trips made on public transit has dropped from 12.6% to 3.5%. The transportation lobby likes to cite a small increase in public transit trips during 1995-99 but chooses not to discuss this catastrophic, 40-year market share decline for public transportation reported by the Department of Transportation.

Why are Americans, particularly Californians, so anti-public-transit in the way they behave? Why, despite the fact that the Santa Clara County light rail has two stops within one block of Cypress Semiconductor, do I rarely see more than a few of our 1,500 San Jose employees disembarking from the empty trains that run down North First Street? The political forces that want expensive, inefficient public transportation at any cost argue that ridership will not increase until the entire system is built out. There is a more obvious answer: time, the most valuable and irreplaceable thing we have. A $2.00 gallon of gasoline will take my car 30 miles, and save me a half an hour. That's why 94% of Silicon Valley trips are made in cars-and we hope that others will use public transit to give us more room on the roads.

The fact is no American light rail system built in the last 20 years has ever relieved traffic congestion significantly. The most heavily traveled light rail line in the U.S. is the Los Angeles-Long Beach "Blue Line." Even the Blue Line carries only 80% of the capacity of just one freeway lane! The Santa Clara light rail carries only a fraction of the Blue Line's traffic. But it cost 5 times more to construct than a freeway lane. Light rail is an economically unjustifiable loser. According to the U.S. Census, during the period of 1980-1990, 10 cities (Pittsburgh, Buffalo, Washington, Baltimore, Atlanta, Miami, San Francisco, San Diego, Portland, and Sacramento) invested heavily in light rail. In nine of the 10 cases, public transit's share of market decreased after the investment (Pittsburgh: 11.4% to 7.8%; Buffalo: 6.31% to 4.45%, etc.). Only in San Diego did public transportation ridership not go down after light rail construction-it stayed constant at a low 3.2% figure. So why are we being told what a great investment Measure A is? My answer: poor management.

Silicon Valley companies are generally well run because most of our managers realize that we are immutably subject to the laws of physics and economics. Electrons and photons aren't Democrats or Republicans. They don't accept campaign contributions, but they will put a company out of business if it fails to act logically. Unfortunately, governments are run by politicians who do take contributions, and they never go out of business, despite egregious violations of physical and economic principles. It's clear that Silicon Valley public-sector management performance is not meeting the standard of excellence set by the private sector.

Contrary to the campaign claims about the efficiency and time savings of rail transit, the opposite must be true, or people would just use public transit and read the morning paper on the way to work. Taking the train, rather than a car, awkwardly divides a trip into three segments: the drive to the station, the station-to-the-station train trip, and the final leg of the trip, from the station to work. The automobile is immeasurably better suited than a train for segments one and three. Even the argument that trains are better for the station-to-station segment falls short when our ponderously slow light rail is compared to a reasonable freeway, like 280. Trains beat cars in the station-to-station segment only when high-speed trains with few stops (i.e. not light rail) are matched against congested freeways on relatively long commutes, which many of us avoid through flex hours or living near work-or just by working during the commute; e.g., I dictated this editorial on Highway 85 at 7:30 a.m.

We should demand that Silicon Valley officials make decisions based on fact and reason, rather than making political decisions "justified" with factoid rationalizations that simply do not stand up to scrutiny. The cost-benefit analysis of Measure A does not miss the mark by a few percentage points. The measure is too expensive by hundreds of percentage points.

If our City Hall officials were willing to consider alternatives (and my direct conversations with them suggest that they are adamantly opposed to alternatives other than their shiny, expensive trains), they would have found that there are existing transportation systems which offer, relative to light rail transportation: 1) a factor of five lower cost, 2) double the average speed and 3) 10 times more throughput.

One of them, Los Angeles' El Monte Busway, accommodates the three-legged nature of commuting. Buses deploy to residential areas in the morning, making normal local-loop runs. Then, they become express buses by moving onto their own freeway lane (which is separated from the main highway by a concrete curb) to speed the station-to-station segment of the commute. Finally, the buses re-enter the local-loop as they drop off their passengers in commercial zones. It would be extraordinarily cost-efficient and customer-friendly to deploy a fleet of well-appointed buses which, for example, would cover Morgan Hill to pick up passengers in the morning, zoom to San Jose on an express lane, and then drop off passengers on local routes in Silicon Valley. The reason the El Monte Busway works so well is that it delivers a complete solution to the commuter, not an expensive train that goes from nowhere to nowhere.

City Hall says that once the light rail system is built out and integrated with both BART and commuter trains, it will be effective. The problem is that the BART and commuter rail proposals are even more expensive than the light rail proposal. And three expensive bad ideas don't add up to one good idea. Also, the excuse that we should expect under-utilization until the system is built out is simply not borne out by the ridership statistics in any U.S. city. Wendell Cox Transportation Consultancy, an Illinois-based traffic consultation firm, analyzed the rail systems in 12 cities to determine what congestion relief is provided by those systems. They showed that if the total traffic carried by 11 of the 12 light rail systems in any of those cities were dumped onto the streets, it would not increase traffic congestion by even one-half of one percent. The exception is Washington, D.C., where the Metro Rail equates to 1.6% less traffic congestion. By the way, Washington completed its rail system years ago, and has never realized the degree of benefit to traffic congestion promised-without delivery-in city after city. When I presented this data to City-Hall proponents of Measure A, I was given a study that purported to refute this data. On closer inspection, the study resorted to bizarre "new math"-excluding from the statistics commuters who do not live conveniently close to train stations. Amazing how a redefinition of market share can make the numbers better.

In 1996, I testified before the U.S. Senate against corporate welfare. The witness who followed me, a lobbyist for the American Electronics Association, told the committee that he represented thousands of companies and that "high tech" favored corporate welfare. In the middle of his presentation, I realized that Cypress's membership in the AEA was contributing to the salary of a man who was not only contradicting me, but attacking my fundamental principles. Upon my return to Cypress, I fired the AEA and several other Washington lobbying groups that we had joined out of some vague sense of industry-government cooperation. As I analyzed this experience, I came to believe that lobbying organizations often make the fatal assumption that the people they represent are merely out to get a bigger piece of the governmental pie, rather than to do what's right. In like manner, the Silicon Valley Manufacturers Group (SVMG) has made pronouncements that "high tech" supports Measure A. Carl Guardino, the SVMG president, has also told the press that "high tech" supports Proposition 39, the ballot measure that eliminates our constitutional protection requiring a two-thirds majority vote to raise taxes. Cypress, an SVMG member and certainly a member of the "high tech" community, supports neither measure. Measure A is an economic loser that would not pass rudimentary economic scrutiny in any well-run organization. Politicians and political lobbying groups lust for the "accomplishment" of passing billion-dollar programs that need "new math" to justify absurd expenditures.

Silicon Valley residents should demand top-quality management not only in the private sector, but also in the public sector. There is no time urgency about Measure A. It will not be implemented for years, even if passed. Let's defeat Measure A soundly, and demand that the next proposal for public transportation be based on merit and not on politics.

And, by the way, Carl, you're fired