President meets with Intel execs on their plans

Casa Presidencial said Monday that President Laura Chinchilla and other commerce officials would meet with the CEO of Intel Corp. and various other company officials.

However, the Costa Rican version of the meeting is not going to be revealed until a press conference today.

Ms. Chinchilla is meeting with Brian Krzanich, who has held the top spot in the company for a few weeks less than a year. Fortune Magazine calls him a highly practical man who has been with the company since 1982 when he was graduated from college.

Casa Presidencial said that the meeting has been scheduled for some days and the purpose is to learn the company’s plans for its transformation of its operations in Costa Rica. The announcement does not say that Ms. Chinchilla will try to reverse the company’s plan to move its manufacturing operation to Vietnam and fire 1,200 employees.

Instead, Casa Presidencial said that officials here hope that the firm will continue strengthening its operations in research development and services.  Some 1,500 employes are involved in this type of work here.

The president was also said to be seeking a gradual withdrawal of the manufacturing operation and consideration for the workers.

After learning about the company’s plans over the weekend, some expats are blaming Costa Rica.

However, problems facing Krzanich are much bigger than the Costa Rica operation. He had taken over the reins of the company at a time of stagnant stock prices and a declining market for what the company makes best: chips for desktop computers.

Said contributor  Kevin Kelleher in a January article in Fortune:

“Much of Intel’s subpar performance is tied to its longtime dependence on chips for the PC market, which has seen sales dwindle in the era of the tablet. It’s not an issue of the technology of Intel’s chips, it’s the devices they’re going into — tablets and smartphones, in particular. Intel has been struggling to find a way into mobile chips, as well as devices in emerging areas like wearable computers and the Internet of Things.”

The company’s stock closed Monday at $26.49, up 50 cents from Friday. The increase does not seem to have anything to do with the situation in Costa Rica. In fact, there did not seem to be any news about Costa Rica and Intel outside the country Monday. The Motley Fool Web site attributed the increase to a securities firm upgrading Intel stock from perform to outperform.

Monday also was the day that Qualcomm announced the details of a phone table processor that uses ARM Holding cores. The Intel competitor is getting good initial reviews.

A good part of Krzanich’s job is to keep shareholders happy. At the very least, he is bold. Fortune noted that he sold off OnCue, a maker of an Internet television device to Verizon for a fifth of the asking price. That was considered a bold strategic move.

According to Casa Presidencial, Ms. Chinchilla is not going to address the situation today. The central government said that representatives of the Ministerio de Comercio Exterior, perhaps minister Anabel González, and someone from the Coalición Costarricense de Iniciativas de Desarrollo, the investment promotion agency known as CINDE, will give details of the meeting.

In 2013 Costa Rica exported $2.4 billion in electronic components for microprocessors. That amount was 20.9 percent of the nation’s total exports of $11.4 billion that year.  In second and third place were pineapples and bananas.

Intel, which has been here 15 years, has declined recently to make more investments in the country. The firm has had operations in Vietnam since 1997, and in 2006 it announced a $1 billion investment there to build its seventh and largest assembly test facility to produce chipsets, the firm said on its Web site. In July 2010, Intel Vietnam began using the latest Intel chipset technologies to produce chipsets that will help support the growth of mobile computing, it added.

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