American companies saves lot of money in term of paying salaries of overseas employees. They moved their business to third world countries mainly for CHEAP LABOR COST. This companies are saving a lot for bringing their factories in Philippines or Malaysia.

On the other hand, due to political unrest in the PI, theft among the employees & other factors contributes to the planning of closing the factory in the PI.

The labor cost in USA is very high, employees are paid by the hour according to union rate. They great benefits that includes Medical Insurance, vacation pay, sick leave, maternity leave, retirement plan,union protection & many others.

Union workers normally earns between $10.00 up to $20.00 & more per hour in USA. This high union rate per hour is what makes the American Companies moved their operation overseas like China where they pay the workers less than a dollar an hour.

I used to work for Intel Corporation in USA ( I am an office worker not a factory worker ) and I get paid over $20.00 per hour. The salary is based on your skill, education and experience. A call center agent in USA gets paid between $10.00 to 18.00 per hour..In the Philippines, call center are paid less than their counterpart in USA. What I am saying here is American companies are doing unfair labor practices in Asia/Philippines. They are under paying their employees…….they bring their business in Asia because of CHEAP LABOR.

I did some business travel as part of the job and got to see the Intel sites in Pudong/Shanghai, Chengdu (then under construction) both in China, and Penang/Malaysia. The Intel site in Bangalore, India is more R&D and not manufacturing.

I am proud to be a Filipino because I believe in the output of the Pinoy once put to task — hence the monicker “Great Filipino Worker” - the respected collective “nickname” our Pinoy Expats around the globe.

But I cannot be proud of the following:
- our infrastructure is years (no, decades) behind China and Malaysia. Just look at the kind of road that the Intel Truck travels everytime a shipment of chips needs to be sent to FedEx in Angeles, Pampanga (in Subic).

- our government and the way its being run. China offers a lot of incentives just to get MNCs come in (there might be some ulterior motives behind it - but that’s another story) while Phil even planned to tax Intel…its like being “penny smart, pound foolish”.

- within Intel Phils — there were lots of concerns about theft of chips and it seemed the whole things is highly-organized - that truly put a damper on whatever pride we have for Filipino work efficiency and quality.

Like we used to say back when I was still working in Intel — “Change is the only constant thing. Change is good.” — This might be hard to swallow for most of the manufacturing specialists who will end up losing their jobs but it is something that’s bound to happen sooner or later with all the issues mentioned above. It is a good thing that a company like Intel will surely provide a generous separate package for employees.

But its not all about the Philippines as an investor’s destination being non-competitive in a lot of ways …let’s face it, the demand for the product has slowed down “globally”, if not for all chipmakers, it is true for Intel. So much so that even development programmes for the Dalian Fab site and the Vietnam Assembly Test factory has slowed from a “go,go,go” gung-ho attitude a few years back. This is driven by the flattening demand roadmap.

If the demand is as robust as before…I truly believe that Intel will keep the Philippines site regardless of all issues. You may have lousy roads, occasional chip thefts (we called them HVI issues - “high value inventory”), and a building structural issue that begs millions of $$$ worth of upgrade — but if the volume requries CV to keep its light open, it would stay open. Phils account for 30-40% of the overall Intel volume of manufactured CPU chips and other chipsets.

You don’t kill a goose that lay golden eggs no matter how old that goose is…as long as the golden eggs keep coming.

But like a fairy tale gone wrong — the Philippine goose will now be off to the slaughter house, as a China Peking Duck can now give the same output at less cost.

Intel hires smart people. And the smart people at the top knows when to quit and give up on a country that shows a dismal ROI.

Of course they can’t say that to Arroyo’s face can they? So they just pin it down on Intel Cavite’s building integrity.

Good old Intel spin.

Every company is always on the lookout for the “bottomline”. Most especially these days when the U.S. financial markets are headed for a slowdown or outright recession.

About your “talented employees” argument, actually most of the talented veterans in Intel Cavite have already left for greener pastures in the past. What you have there are your usual moderately experienced people. In fact, Intel Cavite in the past years have been forced even fresh graduates to be sent abroad for training.

China and Vietnam today are not the same China and Vietnam we know from the past. When it comes to training, the Chinese and the Vietnamese can be easily brought up to speed. So no issue there.

With regards to revenue, Intel has this policy called “Copy Exactly”. Meaning its factories in the Philippines should be identical with those in any other Intel factory in the world. So if all plants are indentical, then the competitive edge will then shift to tax incentives, cheap employee salaries, low cost power rates, and other stability factors, which sadly, Philippines can no longer become competitive.

I repeat, that if you want lasting prosperity you must not allow companies like Intel to milk your inventors. You need to insist that employed inventors are paid a fair royalty. That money will fund domestic startups. When the transnational corporation leaves you will have the foundation to grow beyond their presence.

Readers of this who are aspiring inventors can get help from http://www.InventorEd.org/novice/ . You can get one on one help via our email based discussion group Inventors-L.

I urge everyone to start laying the foundation to control your own destiny. This is what inventors have been doing in America for a very long time.

Ronald J. Riley,

Speaking only on my own behalf.
Affiliations:
President - http://www.PIAUSA.org - RJR at PIAUSA.org
Executive Director - http://www.InventorEd.org - RJR at InvEd.org
Senior Fellow - http://www.patentPolicy.org
President - Alliance for American Innovation
Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
Washington, DC
Direct (202) 318-1595 - 9 am to 9 pm EST.

Reading this article by yuga saying when an Intel employee learned from his boss that there was no roadmap anymore, he immediately resigned.

I think the best option right now for current Intel employees in the Cavite plant, is simply to just stay put and wait for the separation package. This is most especially applicable for longer tenured employees.

If you’ve been employed less than 5 years, then maybe getting a new job and jumping ship now, can be a more attractive option. But if you can still wait 6-9 months, why not wait for the FREE MONEY? Perhaps the global economy would start picking up again by that time, so there will be fresh new employment opportunities elsewhere.

Would it really make sense to leave a “fragment” of your manufacturing operations scattered across the globe? When you could easily fold them into a LARGER operating unit that is already existing and running efficiently somewhere else?

A fragmented operations will cost more, than an integrated one. And besides, the worldwide economy is slowing down brought about by the current subprime crisis in America. It is therefore prudent for multinational businesses like Intel, to really weigh its options at this time.

So it looks like the odds are really not going for Intel Cavite.

You’ll just have to answer this question: Will Intel be in a “disadvantage” position in its business if it will close down its Cavite plant? If the answer is NO, then the Cavite plant is REDUNDANT. It will not be a surprise if it gets the axe. Anything redundant in the corporate world always gets the axe.

The link: http://www.pcij.org/stories/2002/ramos.html

Oh, can I say, welcome to “Capitalism”?

I’m a Socialist :p Capitalism and Communism will only suppress the people. And too much freedom is not good for us, we need to use our brains, not our mouths.

One more thing, since it was also mentioned, I want to say thanks to our current form of government. (I believe in the Federal+Parliamentary system.)