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Photograph by Felipe Buitrago
T.J. Hooker: Endlessly quotable tech icon T.J. Rodgers can't keep himself out of the news. Can he manage the same high profile for his newest investment, solar power?
Sun Total
Controversial Silicon Valley maverick T.J. Rodgers is suddenly high tech's biggest champion of alternative energy. Does it matter that he's ultimately in it for the money? Or that he can't stand environmentalists? He certainly doesn't think so.
By Najeeb Hasan
T.J. RODGERS is sitting pretty. Well, perhaps not physically pretty, as he nonchalantly offers a clammy handshake while showing off his massive, tree-trunk-size thighs in running shorts and a T-shirt, having just completed his customary four-mile run along the unforgiving pavement of the valley's tech capital in north San Jose.
But if we're talking money, or the freedom to make more of it, then, yes, he's sitting pretty. It should also be noted that, during a photo shoot about an hour later, he does cave in to conventional decorum, trotting out of his office to shower and change into a handsome suit and a pink-striped dress shirt.
On this day, a balmy Thursday afternoon in August, Rodgers points to his ankle, where there appears to be a golf ball wedged inside his sock. No, he explains matter-of-factly, he sprained his ankle during a previous jog and the swelling has prevented him from running again until today.
If there's nothing that will keep him off his feet, there's hardly anything that will keep him out of the news, as well. That's because Rodgers is one of those rare Silicon Valley entrepreneurs colorful enough to make the jump from the obscure dreariness of the valley's business pages. He was dubbed "one of America's toughest bosses" by Fortune. And there was the infamous incident in which Rodgers publicly and unapologetically skewered a nun who demanded he include more women and minorities on the board of Cypress Semiconductor, the company he's run since 1982.
He made waves again when he called the federal government's post-9/11 curtailment of civil liberties a bigger threat to America's freedom than any threat "posed by Al-Qaida" in the op-ed pages of the Mercury News. He's also courted controversy with his public criticism of hobnobbing with government officials to win tech subsidies, and his still-ongoing feud with residents in La Honda about a vineyard he's building on the region's hilly terrain.
But these days, Rodgers is raising eyebrows with his foray into alternative energy, namely solar power. This chapter began six years ago, when Rodgers ran into an old Stanford grad school classmate, Richard Swanson, the founder of Sunnyvale-based SunPower, a producer of high efficiency solar cells. Told by Swanson that SunPower was on the verge of going out of business, with energy prices still low, Rodgers investigated further and found himself writing a $750,000 check to save—and buy—the business. Today, Cypress owns 85 percent of SunPower, and Rodgers guided his subsidiary's public offering last November. As of Aug. 9, SunPower stock stood at $31.40, after opening at $24.42 in November and peaking at $44.07 on March 1. And, with energy prices increasing and the appetite for solar power following suit—the market demand for solar is expected to more than double by the end of 2008—The New York Times described Rodgers as being "ideally positioned" in the field.
A smart business move by a smart businessman, no doubt—but juicy ironies are also apparent here. Rodgers is now being criticized for entering an industry that relies heavily on government subsidies, after consistently speaking against government handouts. Rodgers says that no less an authority than economist Milton Friedman has advised him that there's nothing wrong playing the rules of the game while advocating other rules.
But another irony is perhaps not so evident. Rodgers, now at the helm of a company that is widely considered to produce the highest efficiency solar cells in the world, is not ultimately motivated by the same green impulse that drives pushers of solar as an alternative energy. He's unabashedly in it for the money.
Rodgers responds that being in it for the money is ultimately also being in it for the greater good. And Silicon Valley's King of Solar could care less what the global warming crowd says to do about the environment.
"No," says Rodgers with some emphasis. "I didn't do this to be in the high ethical and moral ground as defined by somebody else. ... I did it to make money for my shareholders. And if you believe in capitalism, which I do—most of the eco-utopians do not, they would force you to do what they think is right. And they have a terrible record of being wrong all the time in the past."
Pigskin Philosopher
To understand T.J. Rodgers, you have to understand his relationship with what he calls freedom.
And that he's always been about freedom.
In 1965, Rodgers says, his high school football team in Wisconsin won the state championship. The championship game was played at the old Packer Stadium and, after victory, Rodgers' team had a banquet, where each player read a personal statement. A couple of weeks ago, Rodgers was digging through his garage and found his statement from 1965.
"It said—and why I would say this at a football banquet, I have no idea—'I can't tolerate those who encroach on my freedom,'" says Rodgers. "An 18-year-old kid. At a football banquet. Yeah, it's always been there."
Freedom, for Rodgers, still means just what he wrote as an 18-year-old kid in 1965. The right to do what he wants, without anybody (read: especially the government) having the right to coerce him to do otherwise. That's why, despite his belief in capitalism and the "American way," he was against the Vietnam war—and that's why he's against the current war in Iraq. He doesn't agree ideologically with either the North Vietnamese or with the Ba'athists, but using force against them to induce change? That's coercion, he says. "Coercion," naturally, is one of his favorite words, and one he uses often when talking about the people whose ideologies he hates. A coercive utopia, for Rodgers, is when you're willing to implement your good ideas by forcing others to do them.
This description, no doubt, would include the vast majority of alternative energy advocates, including those who are pushing solar as a solution. "I deeply dislike the [Al] Gore-crowd types who want to scream 'political tragedy coming on, therefore you must do what I want,'" says Rodgers. "As a matter of fact, that's one of the things I like least about doing an environmentally correct thing—that some of the company I keep I don't like very well."
Live Free or Die
Often, the way he uses the word "coercion" in its various forms makes it sound almost like a disease, a disease he admits that he was afflicted with once as well, until he was about 35.
"Since [then], I've understand about freedom," he says. "All you need to do is read the Bill of Rights and understand how the free market works and look at the prosperity of Silicon Valley and look at the squalor and dilapidation of any country that doesn't have free markets. You realize that freedom and free markets are right because they make people freer and better off."
Today, if an initiative doesn't pass Rodgers' coercion sniff-test, then it's unlikely it'll get very far with him.
"I got a call from a Silicon Valley executive the other day," he says, "and he said, 'A bunch of my friends and I are going to sign a letter and send it to the legislature in California—we want all cars in California to [be able to] run on ethanol or gasoline. Either fuel. It only costs 150 bucks to do it, and we think that's the right thing to do.' And I wrote him back and said I'm not interested in that. I'm not interested in forcing people who make cars [to makes cars] some way they don't want to make cars; I'm not interested in forcing people to buy another 150 or 300 dollars in an automobile that's not working for them."
The principle, Rogers continues, is simple. If the market wants that—automobiles that can run on both ethanol and gasoline—then it'll ask for it. He points out that Renault, the French auto-maker, is now equipping some vehicles with that very capability. If successful, the logic goes that Renault will take market share and other companies will follow—because Renault is the leader and saw the right product. Companies, thus, will have voluntarily accepted it. More importantly, they were not coerced by forces outside the free market.
"And just FYI," Rodgers adds, "I happen to think that gasoline or ethanol cars may not be the right way to go, that electric cars or electric/solar cars may be the right way to go. And therefore to force everybody to spend the money that might be invested in electric/solar cars on ethanol/gasoline cars is a bad investment. So in this particular case, I happen to have a better different idea, but as a general principle, even if I'm agreeing with the guy, I'm not willing to force people to make something that they don't want to make."
Panic As Politics
And where does that leave the environmentalists? Not in a very positive light, according to Rodgers. He likes to point out what he perceives are the many failings of the secular doomsayers of the past, jumping on the two most common, The Population Bomb (1968) and The Limits to Growth (1972). The first foretold mass starvation in the United States; the second predicted that humankind would perish in great numbers after reaching a population growth limit that would no longer enable them to be viable on Earth. Rodgers calls the first "crap" and the second "garbage," and sneeringly says, "Yet all of these people lectured pompously, as we have the global warming types today [who also] lecture pompously."
This is not to say that Rodgers doesn't accept the fact that resources dwindle. In fact, he's a big believer in what's known as Peak Oil theory. The theory, put forth by M. King Hubbert, a Shell Oil consultant in the 1950s, predicted that the world's oil production would peak in 2000 and then fall. Hubbert also correctly predicted that domestic oil production would peak at about 1970. Rodgers thinks that Hubbert may be off on world oil production by a few years (many Peak Oil theory advocates now say production will peak in 2010), but he is still right that it will peak. What Rodgers doesn't buy is the vision of the movement's main current spokesman, Richard Heinberg, a faculty member of the New College of California in San Francisco, who envisions catastrophic consequences for humanity—picture a devolution to agrarian lifestyles and vicious resource wars—once oil production peaks.
"No, I'm not concerned about some great catastrophe," Rodgers sneers.
Rodgers explains what he sees as a pattern: "They develop a theory, they write themselves a little paperback book, they develop a following, and then they preach and then they want what is, in effect, political power, which means, in effect, the right to order people what to do," he says. "So, no, I react very hostilely toward the moral mandate. Who the hell has the right to tell me what the moral mandate is? To me, the highest moral mandate is that I am making a product, solar cells, that people want, and I sell it to them to make a profit for my shareholders. That's moral, that's right. But the concept that I'm working on some greater good—I am working on the greater good."
Let's Call the Whole Foods Thing Off
The idea that Rodgers is working for the greater good is central to his view of the world, and himself. Case in point: Rodgers uses more than a few profanities when recounting a round table he took part in about the social responsibility of business along with capitalist icon Friedman and Whole Foods CEO John Mackey that was published in Reason last October. Rodgers has no quarrel with Friedman—indeed Friedman is one of his idols—rather, the profanities he used were reserved solely for Mackey, who had argued against Friedman's idea that social good by businesses—whether it's customer or employee care or philanthropy—is only a means to achieve the end of higher profits. Rather, wrote Mackey, for him and Whole Foods, higher profits are the means to achieve the end of social good, in this case Whole Foods' core mission of "higher-quality foods and better nutrition."
"Just as people cannot live without eating, so a business cannot live without profits," Mackey concluded. "But most people don't live to eat, and neither must a business live just to make profits."
Unfortunately for Rodgers, Reason gave Mackey the last word. And, unfortunately for Mackey, he had used that last word to imply how he—and his business—was more socially responsible than Rodgers. People like Rodgers, asserted Mackey, had every right in the world to be concerned ultimately about the profits of their shareholders and argue that the profit was intrinsically valuable for society, but were mistaken if they believed that was business' only purpose.
"Never fucking in the goddamn world did I [or Friedman] say that businesses only live to make profit," retorts Rodgers, after scolding this reporter for bringing up the Mackey dialogue in the first place ("You had a million pages to search," he says, "and you've picked the saddest of them and the most socialistic of them."). "Mackey has no argument; he has no debate. What I said is making profit is the moral imperative. The fact that the son of a bitch would say that ... nobody ever said—Milton Friedman, Ayn Rand [another Rodgers idol] or T.J. Rodgers—that business only exists to make profits. Where he is dishonest, where he is disingenuous, is that he refuses to say what he's doing, he's doing it for his company. He's hypocritical in that he's taking the benefit for his charitable activities [by saying] that only he's good, which I think is crap. I object to people saying, Oh, I'm doing it for the greater good, as if running a free market company is not for the greater good."
This streak of righteous indignation when challenged about the moral imperative—or, as Rodgers would put it, how other people define what the moral imperative is—is nothing new for Rodgers. It emerged perhaps most prominently in 1996 when Sister Doris Gormley, a Catholic nun, sent Cypress Semiconductor a short letter asking that Cypress include qualified minorities and women on its board. In response, Rodgers sent Sister Doris a six-page later, later to be the subject of a Wall Street Journal article, that, in effect, described her request as "immoral." The Journal wrote that Rodgers was so incensed while composing his lengthy response that he left teeth marks on the micro-cassette recorder that he used to record his first draft (he was recording while driving, and clamped the recorder in his teeth while changing gears).
Once again, the key point for Rodgers, was that morality is not something that can be imposed from the outside—the market is the moral agent.
"Absolutely," Rodgers affirms, "and if you ask me what the moral principle is, it's freedom. OK, I have 4 billion dollars' worth of the world's assets that my shareholders have entrusted to me. Subject to being re-elected every year, they allow me to invest that money for them into the fields that are appropriate for my business. And my job is to make a return for their investment. They've got Johnny and Suzy's college fund invested with me. I don't have a right to declare I'm working on some higher purpose and squander their money for something I think is [moral]. My job is to make a return for them, what they expected from me when they gave it to me. So, going forward, I invest in things that I think I can sell. So there again is freedom at work, where I risk money, I risk capital, and I have to listen to people. So I in effect am serving people. If you think about it, people want ecological energy right now. And therefore, I am serving them. I am doing what they want. But that's very different from some demagogue telling me, You must work on this; you must work on that."
Will Solar Shine?
When Arnold Schwarzenegger, in an effort to encourage China to invest in California technology, pulled out a solar chip from his pocket during a visit to China and declared it the "most efficient solar chip in the world," the act was, of course, political theater. But he was right about the chip, which was made by Rodgers' SunPower. Rodgers does, indeed, produce the highest-efficiency solar cells, a couple of percentage points higher than his nearest competitor. Before he invested in SunPower, he had seen the company's astounding efficiency capability demonstrated only in a lab setting. "I had to bet that what they made one of in the lab, I could make millions," Rodgers says. It's a bet he won; last quarter, SunPower produced 5 million solar cells.
Rodgers has a keen understanding of solar energy's potential. It's not going to compete with wholesale power produced by uranium, coal or natural gas plants. But what it can do is reduce the cost of power for the average person; if an energy user switches to solar, says Rodgers, they can make up their investment after about seven years. The energy company, meanwhile, doesn't consider solar a competitor primarily because the solar market is so tiny. Currently, energy users switching to solar actually help energy companies by reducing their expensive afternoon peak usage. Rodgers, to cut the investment cost of solar even lower, has also entered initiatives that will lower the installation cost of solar. But, despite all this, it's abundantly obvious that solar is not ready for the big time. Other than showcase panels on the roofs of some environmentalists or alternative energy companies, people are simply not lining up to invest in solar, despite the huge federal subsidies for solar users. Onlookers, then, call Rodgers a good CEO attempting to spark interest in his product.
"What T.J. Rodgers is doing is that he's hyping his company," says one Silicon Valley executive who follows solar closely. "The amount of sales that they have compared with the value of his company is phenomenal."
There's one thing on which everyone agrees that Rodgers is right—if solar will ever succeed as a viable energy source, it will also have to succeed as a viable option in the market. As one Silicon Valley engineer puts it, "You have people who say, 'Yes, I want to save the planet.' Right now, that's the market." That market—people who have a burning desire to save the planet—is, obviously, limited. The trick is to reduce the costs associated with solar, and to make solar energy reliable, enough to make it a viable option for mainstream consumers who just want to save a few bucks on their energy bills. The apparent greater good of social responsibility bows out to the actual greater good of the bottom line.
But, there are also troubling aspects to Rodgers' way of thinking, his critics say.
"T.J. Rodgers' SunPower may be a market-driven motivation," points out Sally Tomlinson, the director a Sustainable Silicon Valley, a partnership of business, government and organizational interests that addresses regional environmental issues, "but there are other businesses who are interested in [pursuing alternative energy] because not only do they see the market, but it's the kind of thing that they would really like to see succeed because they feel they are doing good at the same time. You might see the market for missiles, but not decide to go in that direction."
Also, says George Lakoff, the Berkeley professor and progressive thinker who authored the bestselling Don't Think of an Elephant shortly before the 2004 elections, the idea of positioning the market as the moral agent rests on a number of myths. "There are a set of mythologies about the market," says Lakoff, "that, for example, everybody here has equal access to the market, that everybody has the same information about the market, that there is sole and fair competition in the market; all these things which are utterly false, so there is a set of false myths."
Lakoff, who has also written a book entitled Whose Freedom?, further questions Rodgers' definition of freedom. Lakoff creates four categories of freedoms, to which he says you can apply the central question "Whose freedom?" For example, in a classic capitalist view, regulations impede the freedom to make money; in Lakoff's view, regulations ensure freedom from harm. Another example Lakoff gives is taxes. Whereas a capitalist would again say taxes impede the freedom to make money by taking away the reward for production, Lakoff would respond that, on the contrary, by supporting the commonwealth—that is, the nation's infrastructure that allows businesses to make money—taxes actually give the individual the freedom to pursue profit.
"There's not one notion of freedom," says Lakoff. "There's a common core that's the same for people, whether they're conservative or progressive. Am I free to breathe free air? Do I have environmental freedom to drink clean water? You're producing cars that are putting gook in my lungs. I am not free to breathe clean air due to that. He [Rodgers] is not considering that. Am I free to live in a world where people are not allowed to destroy the world through global warming? That's a form of freedom, but it's not freedom within his limited scope."
"I'm not a conservative complaining about liberals," Rodgers says. "To me the 'greater good' is a catch phrase for people trying to force you to do what they want. And it's both sides of the political spectrum; it's not a liberal thing only. You look at our current administration. They have all kinds of greater good things. For example, they have decided what can and can't be done with embryo research. They're forcing people to follow their dictates. If you look the Constitution and the Bill of Rights, it's freedom from, not freedom to. The Bill of Rights doesn't give you a right to something, it gives you the right not to have the government do something to you."
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