April 23rd, 2014 (InsideCostaRica.com) A video obtained by Spanish-language digital newspaper, CRHoy.com in which Intel CEO, Brian Krzanich, says that Intel’s decision to close its manufacturing operations in the country came after the company “spent several years trying to work with the Costa Rican government” to reduce the cost of its Costa Rican operations, would seem to contradict the government’s official line that Intel’s decision was completely internal and not related to conditions in the country.
In the video, Krzanich said the decision to shutter its Costa Rican operations “were not necessarily targeted towards headcount reduction,” as has been the case with some other closures and restructurings at the company, but instead was based “around the cost [of the Costa Rican] operation.”
Krzanich added that Intel “has spent several years trying to work with the Costa Rican government to try to reduce the overall cost of that operation, but we just aren’t able to get it there.”
“And so we made a very difficult decision […] if you’ve ever closed a factory it’s a very hard thing to do; I hate doing it; there is a big investment in the people capability that we’ve had there, and that decision was more about the long term operational cost of that operation, not targetting [reduction of Intel’s employee headcount],” Krzanich said in the video.
The video surfaces after government officials have spent the last two weeks trying to convince a worried public that Intel’s decision to leave the country was a completely internal decision and part of a larger restructuring underway at Intel worldwide.
Foreign Trade Minister, Anabel Gonzalez, insisted after Intel’s April 9th announcement that Intel’s decision was for internal reasons and not due to a deteriorating business climate. “The country has been making great strides in services, innovation and technology,” she said at the time.
In an interview published yesterday by Bloomberg, Olivier Castro, who has been selected by President-elect Luis Guillermo Solis to head Costa Rica’s Central Bank said, “What happened with Intel and Bank of America is not the result of something the country did wrong.” Castro also went on to dismiss Citigroup’s slashing of its 2015 growth forecast for Costa Rica as a result of Intel’s departure.
While Krzanich does not elaborate in the video on the nature of Intel’s discussions with the Costa Rican government, nor does he elaborate on the nature of the high costs associated with the operation, other business leaders have complained in recent years over what they feel is declining competitiveness in the country, including high electricity costs and other issues.