'There was nothing govt could do to prevent Intel exit'

MANILA, Philippines - There was nothing that the Philippine government could do to keep US chipmaker Intel Corp. to stay in the country, a local representative of the company said. Although Manila has done its best to support Intel, the “global financial crisis" was mainly to blame for Intel’s decision to shut down its Cavite assembly test facility, Arlita Narag, Intel Philippines corporate affairs manager, told reporters in a briefing. Narag brushed aside insinuations that the country’s higher power cost and higher wages were among the reasons why Intel was pulling out of the Philippines. In 2008, the entire value of exports from the Cavite facility was $5 billion. The “dramatic decrease in the demand" for products such as personal computers and mobile internet devices had taken a toll on the company's earnings, she said. In December 2008, total exports from the Cavite plant amounted to $250 million from $444 million in the same month in 2007. Narag also said the factors why Intel has chosen to leave the Philippines were the age of its facility, the age of the technology being used and the overall capacity of the plant. Intel has started its manufacturing in the Philippines in 1974 while the Penang, Malaysia plant, which will also be closed, has also started its operations in the 1970s. The Cavite facility produces "significant volume" of chip sets and microprocessors for Intel. "Nobody knew a quarter ago that the financial crisis would be that severe. We did not even know two months ago, so when the decision came to streamline Intel's operations and that the Cavite facility will be shut down, it was really news to us," she said. Some of the 1,800 workers, majority of which are women, were “emotional." The 1,800 workers already included the company’s executives in the Philippines. Most of the Cavite-based employees of Intel have been with the company for 10 years. "A very few were with Intel since the beginning of our operations in 1974," she said. Only Intel’s Makati-based staff of 20, or those handling its sales and marketing divisions, will be retained. The facility will be totally shut down in the second half of the year. Meanwhile, a senior SM executive issued a challenge to Intel’s laid off workers, saying that they should “reinvent themselves." "Those laid off from Intel should reinvent themselves and re-enter the labor force," Corazon P. Guidote, SM Investments Corp. vice-president for investor relations told GMANews.TV. "The most important thing amid this crisis is to have self-confidence," she said at the sidelines of the Labor Forum 2009 at the Asian Institute of Management. “If we know what our strengths are, it would be easy for us to market ourselves." Guidote said government should also step in by providing workshops to retrain and re-tool the workers' skills and "instill self confidence." Next: Intel has no plans for shuttered Cavite property Intel has no plans for shuttered Cavite property In the meantime, Narag said the company is offering exit services to its employees such as livelihood training programs, personal finance seminars, and job fairs besides ensuring of "fair" severance packages to support their employees and their dependents during these difficult times. "There maybe exceptional cases where an Intel Philippine employee may be transferred to Intel's other sites in Asia, Europe, and the US," she said. She said she has no idea how much Intel will be spending for the severance payments for its Cavite employees. Intel also has yet to decide on what to do with 19.83-hectare facility in Gen. Trias in Cavite. "These things will still have to be sorted out by Intel headquarters in Santa Clara, California," she said. Originally, Narag said, that although Intel was planning to transfer to a much smaller Laguna plant, it still wanted to maintain its presence in the Philippines. While most of the Cavite facility’s raw materials were imported, other suppliers of the company’s allied services will also be affected by the shut down. These include the cafeteria operator of the plant and those providing shuttle services for its employees. - With Mark J. Ubalde, GMANews.TV