THE FRIDAY INTERVIEW:INTEL WILL celebrate its 20th anniversary in Ireland in October, but the technology giant will not be breaking out the bunting for a big party. Despite being one of Ireland's largest private-sector employees and one of our increasingly few manufacturers of significance, the mood of the company's general manager, Jim O'Hara, is not buoyant, writes JOHN COLLINS

“These days are part of the price you pay for all the glory days we’ve had,” he says rather resignedly. “It’s tough and it’s not a place we like to be, but it’s one of those deals where, at some point in time, you have no other option.”

The option that O’Hara and his management team had to take recently was making almost 300 staff compulsorily redundant. It came about through the closure of one of four production facilities the US firm has on its Leixlip, Co Kildare, campus.

The facility, known as Fab-14, is one of the older ones on the site, having opened in 1998. Along with Fab-10, the original semiconductor factory in Leixlip which opened in 1993, it had been producing older products, such as the intelligence systems for cars, as well as those not central to Intel such as the flash memory used in digital cameras and iPods.

“I guess the recession has accelerated the demise of some of these products,” says O’Hara. “They might have lasted for some time longer, but as I said it’s not a place we like to find ourselves.”

The newer Fab-14, which can accommodate the machinery for manufacturing Intel’s current generation of microprocessors, is being stripped down and made available to the corporation for a possible future investment.

“As the volumes of the legacy products declined, it became apparent that we couldn’t run low volumes in such a large facility. So we spent a lot of money consolidating the new envelope of capacity into Fab-10, so we could have a smaller building, a smaller capacity envelope, a smaller workforce, and that allowed us to compete for longer.”

About 450 staff will remain working in Fab-10. Even after the redundancies are completed in November, the site will employ 4,200. Another 300 work in Shannon at a design centre in research and development.

“We are in the process of emptying Fab-14 and again spending money on that, so that at whatever appropriate time in the future Intel decides to invest the next round in Ireland, we’ll have Fab-14 ready to go,” says O’Hara.

Such investments are sizeable. Intel has spent more than $7 billion (€4.9 billion) on highly specialised plant and machinery for Leixlip since 1989 and the Irish site competes with other Intel facilities and greenfield sites to get them. O’Hara says variables such as operating, construction and energy costs, as well as government incentives, are put into a net present cost model that allows the corporation to compare like for like.

“We have lots in the positive column,” says O’Hara when asked about the pros and cons for Leixlip. All things considered, he says, the Irish operations are competitive and can produce chips at a “similar cost” to other Intel locations. The key differentiator is the skilled workforce that has delivered a return on previous investments.

“It’s hugely important to have a workforce that can ramp these new process technologies fast and predictably,” says O’Hara. “There’s a huge benefit in having a workforce that you have the confidence in to do that.”

Downsides include the “usual chestnuts” of energy and construction costs. Energy costs, which were comparable to other Intel facilities in 1989, rose to twice as much before the recent price cuts. And as the European operation of a US corporation, the strong euro is one of O’Hara’s main headaches. He remembers fondly a time when the euro was worth $0.92 rather than the current level of $1.41.

Like most businesspeople, O’Hara considers falling costs to be one of the side benefits of the recession. “There’s a general sense that Ireland is going to get back into some sort of reasonable equilibrium over the next few years and I think that’s a good thing,” he says.

Having worked for US technology multinationals for most of his career, O’Hara can slip into corporate speak, but he retains a strong Dublin accent. He grew up in the north Dublin suburb of Cabra and, on leaving secondary school in the late 1960s with unemployment running at 17 per cent, the options were get a job or emigrate.

O’Hara landed a role as assistant to the managing director of Brunswick, a US firm with a Cabra base that manufactured bowling alleys, mostly for export to Japan. He rose through the ranks rapidly – primarily, he jokes, because other staff realised it “was going down the tubes”. After five years, when it closed, he was running all operational aspects of the business.

“The great lesson I learned was take your opportunities as they come and make the most of them,” recalls O’Hara. “I was pretty hungry to do that.”

He spent a short period running a haulage firm with a former Brunswick colleague, but realised the future lay with the high-tech multinationals that were starting to set up shop here. In 1973, he landed a job with Digital as a materials planner after spending quite a while pursuing the US computer firm.

O’Hara spent 17 years with Digital and finished up in a role in corporate headquarters running the business outside the US and Europe. The job took him to India, Hong Kong, Taiwan and Australia, where he was involved in joint ventures, establishing distribution hubs and building plants.

Although O’Hara likes to think he was one of the executives being groomed to potentially run Digital’s Irish operations, by the late 1980s the company was in decline as its mini-computers began to lose market share to IBM PCs.

He says he turned down Intel twice, but eventually the lure of returning to Ireland with his young family to help establish the Leixlip operation proved too attractive.

This autumn will mark a new departure for Intel and O’Hara. Although the US firm has lobbied behind the scenes on issues such as corporation tax and energy costs, it has now given O’Hara its blessing to get involved with the pro-Lisbon Treaty group Ireland for Europe and to campaign for a Yes vote in the October referendum. “I, like many other businesspeople sitting on my sofa watching the votes roll in, got a real wake-up call,” says O’Hara. “On reflection, people like me didn’t put a case forward as to why a Yes vote was important.”

He believes the original vote was swung through misinformation and misunderstandings, but that a second vote gives Ireland the opportunity to return to being a player at the centre of affairs in the Europe.

Such a pro-Europe stance may seem surprising from a senior executive of a company that was recently hit with a record €1.06 billion fine by the European Commission for trying to squeeze rivals out of the market.

“Intel is pretty unambiguous around this,” says O’Hara. “The commission is wrong and Intel will fight its corner on that through the legal process.”

However, he is quick to differentiate between the corporation’s attitude to the European Commission and to the EU’s citizens and member states, which are an important market for the firm.

Although 58, O’Hara has no thoughts of retiring. “I plan to live into my 90s, so I am not going anywhere,” he says.

He outlines a vision for Intel in Ireland that you can’t help feeling would be a fitting legacy.

“Picture a scenario in five or 10 years’ time where we have 600 or 800 people [in Shannon] doing research and development at the core of Intel’s road map, and we have thousands of people delivering the latest generation technology here,” says O’Hara.

“The combination of that really puts Ireland on the map for Intel Corporation as a really strategic piece of its core competency. I don’t see any reason why we can’t do that.”

On the record

Name:Jim O'Hara

Age:58

Job:General manager, Intel Ireland

Family:Married with three daughters

Why he is in the news:Intel recently announced 300 redundancies as demand for its older products weakened and no new investment was forthcoming from the parent corporation.

Hobbies:Golf, and spending time in the west of Ireland and with his grandchildren.

Something you might expect:He has been heavily involved with business groups like the American Chamber of Commerce and Ibec.

Something you might not expect:He started work straight from school and did not go to university.