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UnionBank to raise P5B via notes

UNIONBANK of the Philippines, Inc. is looking to raise P5 billion in fresh funds. — BW FILE PHOTO

UNIONBANK OF THE Philippines, Inc. is seeking to raise P5 billion through unsecured subordinated notes.

In a filing with the local bourse on Wednesday, the bank said the unsecured subordinated notes qualifying as Tier 2 capital which will mature in 2030 will have an oversubscription period.

The lender said the notes have a yield of 5.25% per annum payable in arrears quarterly.

The issue could be upsized by up to P20 billion.

The notes, which were offered starting Feb. 4, will be available up to Feb. 14.

They are set to be issued on Feb. 24.

UnionBank said the notes will mature on May 24, 2030. Meanwhile, its call option date will be on May 24, 2025.

Investors can avail the bonds from P500,000 and in increments of P100,000 thereafter.

Hongkong and Shanghai Banking Corp. and Standard Chartered Bank will serve as the joint lead arrangers and bookrunners for the issuance.

The lenders will also be the selling agents for the bonds, alongside UnionBank.

The lender is also scheduled to redeem P7.2 billion worth of unsecured subordinated notes on Feb. 20 as it has exercised its call option for the papers.

The Aboitiz-led lender’s net profit grew 40% year on year to P8.5 billion in the first nine months of 2019.

UnionBank’s shares inched up by 0.76% or 45 centavos to P59.95 apiece on Thursday. — LWTN

JPMorgan mulls return to FHA-backed loans

JPMORGAN Chase & Co. is looking to return to a US mortgage program. — REUTERS

JPMORGAN CHASE & Co. may jump back into a US mortgage program that helps low-income Americans buy homes, mulling a return years after most banks pulled back from the business in frustration over billions of dollars in penalties.

The New York-based bank is deciding whether to offer more loans insured by the Federal Housing Administration (FHA), a program that insures more than $1.2 trillion in US mortgage debt, according to people familiar with the matter.

Promises by President Donald Trump’s administration to make it easier for lenders to avoid fines for mistakes in underwriting are prompting JPMorgan executives to take a fresh look at the risks of making a meaningful push into the market, the people said, asking not to be identified discussing internal talks. The deliberations are still active, and any decision to proceed will depend on a variety of factors.

The return of JPMorgan, the nation’s largest bank, would almost certainly encourage competitors to revive their own FHA lending. Chief Executive Officer Jamie Dimon has been a vocal critic of the government’s punishment of banks for errors in loans backed by the agency, telling investors in 2017 that JPMorgan had scaled back its FHA lending because “aggressive use” of the False Claims Act, which resulted in massive fines, had made the program too risky and cost prohibitive for banks.

Now “banks generally don’t do any FHA because of the legal risk,” Mr. Dimon said at a conference in September. “That’s not good for America.”

SIGNIFICANT MARKET
The FHA insured $215 billion in loans last year, representing more than 11% of mortgages issued in the US, according to the Department of Housing and Urban Development (HUD) data.

Mortgages backed by the agency could offer banks an additional way to sell products to customers they already know. And because most of the homebuyers have modest incomes or are members of minority groups, banks can use the loans to help satisfy their obligations under the Community Reinvestment Act, according to Pete Mills, a senior vice president at the Mortgage Bankers Association.

A JPMorgan spokeswoman declined to comment on internal talks. A spokeswoman for the HUD, which includes the FHA, said it’s a priority for the agency to give lenders regulatory clarity so that they have confidence in issuing FHA loans.

The FHA’s commissioner, Brian Montgomery, has previously said big banks were committing to getting back into the program, without specifying which ones.

The FHA, created by President Franklin Roosevelt during the Great Depression, sells insurance that lets borrowers get loans with a down payment of as little as 3.5% and a credit score as low as 580, on a scale of 300 to 850. Banks can originate and service FHA loans. They can also package and sell them to government-backed Ginnie Mae.

They’re a lifeline for borrowers who can’t qualify for traditional home loans, such as those packaged into bonds and sold to Fannie Mae and Freddie Mac. But the FHA needed a bailout after most of the loans it insured in 2007 and 2008 went bad as housing prices plunged. President Barack Obama’s administration later went after banks that had underwritten the debts.

GETTING PUNISHED
Bankers took particular umbrage over the government’s decision to levy penalties under the False Claims Act, a broad Civil War-era law designed to protect the government from fraud by extracting as much as three times damages. In 2017, Mr. Dimon said fines at his bank had “wiped out” a decade of profits from the program, and that lenders would be more willing to participate in the program if the FCA were used to penalize intentional fraud instead of immaterial or unintentional errors.

The agency tried under Mr. Obama to assuage the industry with policy changes, but banks said the reforms didn’t go far enough.

The retreat by big lenders, also including Bank of America Corp., ultimately increased costs for lower-income borrowers and left them with fewer financing options, according to HUD. The void was soon filled by a roster of non-banks, including Quicken Loans, which regulators have warned are more lightly regulated.

Mr. Dimon has long urged policy makers to reform the US housing finance system, arguing last year that opening up the securitization market and easing “onerous and unnecessary” rules for creating and servicing loans would increase home ownership and boost economic growth by as much as 0.2% a year. — Bloomberg

Nonstop

1917
Directed by Sam Medes

SAM MENDES’ 1917 — about a pair of soldiers crossing No Man’s Land to deliver a crucial message — is reportedly the odds-on favorite to win big at the upcoming Academy Awards ceremony this coming Sunday. Does it deserve the frontrunner status? Well let me put it this way:

The pic does feature an impressive technical feat: the entire narrative seemingly captured in a single shot. Actually several lengthy shots digitally stitched together using shadows, explosions, a dive into water to hide the transitions. The stitching is impressive — you have to look carefully to spot the seams and I’ll readily admit I’m probably mistaken in many if not all my guesses; the choreography is impressive too, with people, practical effects, and pyrotechnics interacting for tens of minutes.

If we’re talking stuntwork though — and, yes, I consider this stuntwork, only it’s primarily the camera performing all the leaps and tumbles — I’d say the one example that really shoved me off my seat was Alexander Sokurov’s The Russian Ark — not just an imaginative journey through Russian history and a fabled repository of that history (The Winter Palace in St. Petersburg) but a beautifully choreographed duet between the camera and musicians, dancers, actors, artworks, and the palace itself, all bristling chandeliers and echoing ballrooms and neverending hallways. Talk about precision, not only do the performers have to hit their marks they have to do it in tune, to the beat; all done in an uncut unstitched-together 96 minutes of high-definition video.

While we’re at it, a nod to other one-shot (real and apparent) wonders: Alejandro Inarritu’s Birdman; Sebastian Schipper’s Victoria; Remton Siega Zuasola’s Ang Damgo ni Eleuteria. Schipper’s film, despite the low budget, comes closest to resembling 1917’s aesthetics — expressing the desperation of the bank heist and its fubar aftermath in a single literally inescapable take. Zuasola’s heroine — she’s promised to an unseen German suitor to help pay family debts — comes to see her future as a one-way rail, exiled in a foreign country and trapped in a loveless marriage.

In either case the style feels limiting, closed-off, claustrophobic, and appropriately so; the characters stew in their respective dilemmas, the tension building to some kind of dramatic resolution. Birdman is somewhat different — Inarritu takes his cue from the nature of theater and shoots backstage drama segueing seamlessly into forestage drama, moves his protagonist from immersive reality into simmering fantasy with the protagonist’s superhero counterpart popping in from time to time (at one point hovering over one shoulder, wings flapping leisurely) to whisper subversive thoughts in his ear.

In each case the style adds something to the film, either suggesting inevitable fate or suggesting a continuity with the past or with one’s interior fantasy. 1917, as the director has repeatedly asserted, is shot in long take to “immerse” the audience in the action. Point taken but the style (as in the aforementioned examples) could have added so much more.

The camerawork is easily the movie’s best feature, if not quite as groundbreaking as it likes to proclaim; the acting is excellent, aside from the distraction of celebrity cameos (Mark Strong, Andrew Scott, Colin Firth, Benedict Cumberbatch). The script — the script has yet to justify that camerawork, among other sins.

There’s thundering overuse of Chekov’s Gun — if a soldier hooks his hand on barbed wire you can be sure he’ll be dipping that same hand in a festering corpse; if we see rats skittering about No Man’s Land you can be sure they will make a more memorable reappearance; if unpasteurized milk is discovered in a bucket you can be sure it will later be put to good use.

There’s the yawning lack of a point to the picture: if the purpose of this extended exercise in 100 meter sprints is to say “war is hell” we got that as far back as King Vidor’s The Big Parade, more memorably (in my book) in films like Paths of Glory or Grand Illusion — despite the latter having not a single battle sequence. If the picture is meant to pay tribute to the men who fought and died in The Great War, that’s well and good, if a tad belated (Peter Jackson had already done so a year earlier with previously unseen — if unnecessarily colorized — footage in They Shall Not Grow Old).

Some have compared the picture to a first person shooter game, and I see their point: our sadsack hero runs here and there, dodges ineptly fired bullets (the Germans apparently having trained in the same military school as Imperial Stormtroopers), runs into one impossible situation after another to emerge barely nicked. If we know little more of our protagonist other than his rank and surname that again is the fault of the script; captured soldiers are more forthcoming (at least we learn their full name and serial number) and videogame avatars more familiar (even in an online multiplayer scenario you come to know your opponents’ moves, tactics, overall strategy).

It’s not a bad film — the sequence with the sniper was I thought well done — and not morally objectionable; if anything my main complaint is that it doesn’t really dare much save its main gimmick. Does it deserve an Oscar for Best Picture? Absolutely: it’s exactly the kind of elephantine step-on-no-toes mainstream work that wins the love of Academy voters. Helps that the movie has earned some $250 million in a little over a month — the voters love to give back to a moneymaker that has contributed so generously to the industry.

Globe releases 5G-ready Huawei smart phone

GLOBE TELECOM, Inc. on Thursday launched its first fifth-generation (5G) network-enabled smart phone, the Huawei Mate 30 Pro, as it aims to expand further its network this year to meet the continuing strong demand for data.

“Today, the company announced the release of Huawei Mate 30 Pro, the first 5G-ready device for its Platinum customers,” Globe said in a statement on Thursday.

Globe said that for this year, it is targeting to transform areas within major central business districts “to 5G mobile-capable sites.”

“Amid competitive pressures and rising challenges in the operating environment, Globe continues to fulfill its long-term commitment to provide the Philippines with first-world internet connectivity,” said Ernest L. Cu, Globe president and chief executive officer.

Citing Digital 2020: Global Digital Overview report by We Are Social, Globe said: “The Philippines has the highest average time spent on the Internet with nine hours and 45 minutes.”

It noted that the Philippines also “ranked first in daily time spent on social media with an average of 3 hours and 53 minutes.”

Globe has reported that it posted a 20% growth in its consolidated net earnings in 2019 to P22.3 billion, backed by higher revenues from customers’ data consumption. — Arjay L. Balinbin

Credit Suisse revisits spying claim by former US employee

NEW YORK/FRANKFURT — Lawyers for Credit Suisse last week re-interviewed a former bank executive who said the Swiss lender had her followed in New York, according to a person familiar with the matter, weeks after the company dismissed her allegation as baseless.

Credit Suisse asked lawyers from Zurich-based firm Homburger to speak again to Colleen Graham, who worked in the United States for a joint venture half owned by the bank, about her allegation that she was put under surveillance in July 2017 while in dispute with the bank, the person said.

Two Homburger lawyers met Graham in midtown Manhattan on Jan. 30 and said they had follow-up questions about her surveillance allegations, the source said.

The source declined to be identified due to the sensitivity of the matter.

Reuters could not determine why Credit Suisse questioned Graham again after saying in December it had conducted “thorough and comprehensive internal investigations” into Graham’s allegations and found them to be “entirely baseless.”

Graham was formerly Credit Suisse’s compliance head for the Americas before being selected to co-head a joint venture called Signac. She left the bank in July 2017 after refusing to adopt its position on an accounting issue that she believed was “mistaken,” according to court documents filed with the US Department of Labor.

According to a Nov. 2017 court filing, Graham said Credit Suisse started retaliating against her in March 2017 after the accounting dispute by threatening to fire her, withholding a bonus, and withdrawing a job opportunity.

Robert Kraus, a lawyer representing Graham, confirmed the Jan. 30 meeting but said Credit Suisse’s latest inquiry “did not appear designed to uncover the truth.”

Investigators did not want to hear from her about the motives for the spying and about a pattern of related misconduct, Kraus said.

Credit Suisse and Homburger declined to comment on whether the firm’s lawyers had been sent by the bank to interview Graham again.

Credit Suisse said that since 2017 Graham had brought several court actions against the bank and others in connection with her former employment and they had been dismissed.

Graham has one pending lawsuit against Credit Suisse for unlawful retaliation under the Sarbanes Oxley Act.

“We are aware that Ms. Graham is preparing yet another action against Credit Suisse. As part of their investigation, Homburger has investigated Ms. Graham’s report that she had been followed in or around New York on behalf of Credit Suisse. Homburger found no indication that her report is true,” it said.

Homburger said it did not comment on its investigations and noted that Credit Suisse had previously reported that, “we did not find any indications that corroborate Ms. Graham’s report that she had been tailed on behalf of Credit Suisse.”

MANHATTAN
Homburger was hired in September by Credit Suisse to look into allegations the bank spied on former wealth management chief Iqbal Khan, previously one of its most senior executives.

Graham emailed Credit Suisse that month with details of her alleged surveillance and asked it to share the information with Homburger, according to the source.

She separately emailed Homburger that month and discussed the matter with a partner from the law firm on Sept. 30.

On Oct. 1, Homburger released a report saying Pierre-Olivier Bouee, the bank’s then chief operating officer and a top lieutenant of Thiam, had ordered surveillance on Khan to see if he was trying to poach Credit Suisse colleagues to join him at UBS. Khan had left Credit Suisse for its crosstown rival over the summer.

In the report, Homburger said “to date, the investigation has not identified any evidence that Credit Suisse had ordered observations of other employees.”

Credit Suisse said Bouee had acted alone and Thiam was unaware of the surveillance. Bouee resigned after taking responsibility for the spying. He has not commented publicly on the scandal and Reuters could not reach him for comment.

Following the internal probe, Thiam called the spying an isolated event. But a second case emerged, when it was revealed in December that the bank had also spied on its former head of human resources, Peter Goerke.

Credit Suisse said Bouee was again to blame in what was a rogue operation.

In their Jan. 30 meeting, the two Homburger lawyers did not discuss the state of their investigation, but asked Graham details about her alleged surveillance, such as the attire of the woman she said tailed her, and whether she alerted the police, the source said. — Reuters

HSBC overhauls Europe business’ management

HSBC logos are seen on a bank branch in the financial district in New York. — REUTERS

HSBC Holdings Plc is overhauling the management of its struggling European business, weeks ahead of a strategic review across its global operations.

Stephen Moss is being promoted into a newly created role overseeing Europe, Middle East, Latin America and Canada from March 1, according to a statement. Moss, who will also look after North Africa and Turkey, is currently group head of strategy and chief of staff.

James Emmett, chief executive officer of HSBC Europe, will leave the bank and be replaced by Nuno Matos, most recently head of the lender’s Mexican business. The moves come weeks after HSBC announced senior changes that included replacing its top investment banker.

Mr. Matos is a close lieutenant of HSBC’s acting Chief Executive Officer Noel Quinn, who is the front-runner to become the bank’s permanent boss. Mr. Quinn has led HSBC since last August, when he replaced the ousted John Flint.

The last 18 months have been challenging for HSBC as it has faced a series of problems in its core Asian markets that are responsible for the bulk of the bank’s profits. The US-China trade war and prolonged protests in Hong Kong, the heart of the lender’s business, have hit its business and been exacerbated in recent weeks by the coronavirus outbreak. HSBC’s European arm, meanwhile, lost $944 million in the nine months to September.

HSBC is Europe’s largest bank and has operations in more than 60 countries employing about 237,000 staff. In its third-quarter results the bank reported an adjusted pretax profit of $5.3 billion, down 12% and below an analyst consensus for the period.

Mr. Quinn and HSBC’s senior management team are set to unveil a new strategy for the bank alongside its full-year results on February 18. — Bloomberg

Sweet Valentine’s treat

ARTISANAL bakeshop Manu Mano has come up with Browned Butter Dark Chocolate Cookies for Valentine’s Day. The cookies are made with 55% dark chocolate from Auro, high quality unbleached flour, browned butter for depth of flavor, and a sprinkle of salt to balances the taste and enhances the sweetness and chocolate flavor. The cookies come in boxes of six. The bakeshop is taking reservations (text 0945-614-9186) for the cookies and accepting walk-in customers everyday from Feb. 10-15. Meanwhile, all Manu Mano breads are 35% off on Foodpanda this whole February, with no delivery fees.

BIR sues seven taxpayers for P825-M liabilities

THE Bureau of Internal Revenue (BIR) sued seven taxpayers over alleged tax liabilities amounting to P825 million.

In a statement, the bureau said the five corporation and two proprietors failed to either pay or contest the tax assessments against them. It noted that they were served with notices of their assessments and they conducted “collection and enforcement strategies” but to no avail.

“The respondents’ failure and continued refusal to file or pay their log overdue deficiency taxes, despite repeated demands, constitute willful failure to file or pay the taxes due to the government,” BIR said.

The bureau said their failure to pay or protest the assessment or file an appeal to the Court of Tax Appeals made the assessments “final, executory, and demandable.”

Sued for the violation of Section 255 or failure to file a return, supply correct and accurate information in relation to Section 253(d) and 256 of the Tax Code are Body Needs & Basic, Inc. Corp for alleged liabilities of P40.4 million 2010, Firotech Fire Protection, Inc. for P26.6 million in 2011, Cristimar Corp. for P27.4 million in 2011.

Fourthwave Global Inc. is charged over alleged tax deficiency of P14.5 million in 2012 and Asiatech Construction & Industrial Corp. for P10.1 million in 2011.

Maerdi Foods/Bestlink Trading Proprietor Donato Pe Benito Bautista has tax liabilities of P698.5 million for 2008 while proprietor Digna Garrovillas Francisco Dimicor Trading & General Merchandising P34.7 million in 2012 and were also charged for violating Section 255 of the Tax Code. — Vann Marlo Villegas

Boeing won’t cancel CEO incentive award

WASHINGTON — Boeing Co. told US lawmakers it will not cancel an incentive award for its new chief executive tied to the return of its grounded 737 MAX despite criticism from Congress, according to a letter made public on Tuesday.

David Calhoun, who took over as Boeing chief executive last month, is receiving a $1.4 million annual salary and is eligible for long-term compensation of about $26.5 million, including a $7 million bonus if he achieves several milestones. The milestones include the return to service of the 737 MAX which was grounded in March 2019 after two fatal crashes that killed 346 people.

Boeing defended the award and noted it is subject to a new clawback policy that applies to misconduct that compromises the safety of Boeing products. It also said Calhoun must serve for multiple years to receive the award.

“We believe tying our new CEO’s incentive-based compensation to key strategic objectives, including the safe return to service of the 737 MAX, is in the best interest of our company, our workforce, and the flying public,” Boeing government operations executive vice president Tim Keating wrote in a Jan. 23 letter to the lawmakers.

Democratic US Senators Edward Markey, Richard Blumenthal and Tammy Baldwin said in a statement on Tuesday that Boeing’s response was “completely inadequate.” They added that if the planemaker “really wants to prove it has learned its lesson about prioritizing safety over profit, then it will cancel the proposed bonus immediately and make sure there is no financial incentive for its new CEO to rush the 737 MAX back into the sky.”

Boeing rejected the suggestion that it is rushing the MAX back into service, reiterating in its letter that its best estimate is that the MAX will not be ungrounded until mid-2020 and that regulators will determine the timing. — Reuters

RBA looking to rid Visa, Mastercard of debit edge

SYDNEY — Australian regulators will consider intervening to stop banks from automatically directing “tap-and-go” card payments through the world’s largest payment processors Visa and Mastercard, Inc., the central bank said on Wednesday.

Banks must stop automatically directing debit card payments through the two global networks, and instead give retailers the cheaper option to use local network EFTPOS, Philip Lowe, the governor of the Reserve Bank of Australia (RBA), told reporters.

“Regulating here is not the preferred option but it is a fallback option if we don’t see the required change,” he said after a speech in Sydney.

Global card schemes Mastercard and Visa, alongside the major four banks, dominate card payments systems in Australia. EFTPOS is owned by domestic financial institutions and retailers.

The RBA says debit card payments, Australia’s most frequently used method, processed through Visa or Mastercard cost retailers more than twice as much as using EFTPOS.

The retailers’ association estimates this adds up to extra costs of between A$300 million and A$500 million ($200 million and $340 million) each year.

“We have made it very clear to the banking industry that we expect them to develop the functionality to allow the merchant to choose which payment rails it goes through, the international schemes or the EFTPOS schemes,” Lowe added.

“If that process doesn’t work then we would have to consider a regulatory solution.”

Visa and Mastercard were not immediately available for comment.

The banks had promised to develop systems to facilitate the cheaper route for retailers, Low said, adding that his preference would be not to have to intervene.

The RBA is reviewing payments regulations to see what strategic issues need to be tackled, from the impact of new payment technologies and new entrants to regulatory technology and an electronic form of banknotes.

“One of the possible reasons for the major banks dragging their feet on least-cost routing is that they each have very extensive relationships with the large international schemes — we will be exploring this in the review,” Tony Richards, the head of payments policy at the RBA, was quoted as saying in the Australian Financial Review on Wednesday.

A spokesman from Commonwealth Bank of Australia declined to comment.

A spokesman for National Australia Bank said the bank started letting its merchant customers choose their payment network in April 2018, adding, “We continue to roll out this service across our client base throughout this year.”

Westpac Banking Corp. and Australia and New Zealand Banking Group were not immediately available for comment. — Reuters

Your Weekend Guide (February 7, 2020)

Stage Kiss

REPERTORY Philippines’ 83rd performance season opens with Sarah Ruhl’s Stage Kiss on Feb. 7 to March 1 at the Onstage Theater in Greenbelt 1, Makati City. Directed by Carlitos Siguion-Reyna, it stars Missy Maramara and Tarek El Tayech. Tickets are available through TicketWorld (www.ticketworld.com.ph, 891-9999).

Under My Skin

PETA closes its 52nd performance season with Under My Skin from Feb. 7 to March 22. Written by Rody Vera and directed by Melvin Lee, it is an anthology drama following Filipinos living with HIV. The play stars Cherry Pie Picache, Roselyn Perez, Eko Baquial, Miguel Almendras, Mike Liwag, Gio Gahol, Anthony Falcon, and Gold Villar-Lim. It is part of PETA’s advocacy campaign on HIV. Tickets are available through TicketWorld (www.ticketworld.com.ph, 891-9999).

The OPM Hitmen

BACKSTAGEPASS productions presents Sing, Love, Laugh with the OPM Hitmen on Feb. 7, 8 p.m., at the Music Museum, Greenhills Shopping Center, San Juan. The show features Renz Verano, Richard Reynoso, Rannie Raymundo, and Chard Borja with special guests Pilita Corales and Eva Eugenio. Tickets are available through TicketWorld (www.ticketworld.com.ph, 891-9999).

Alas ng Bayan exhibit

ALAS ng Bayan, a “herstory” art exhibit featuring paintings of five Filipina heroines in Philippine history, is on view at The Corredor, College of Fine Arts at the University of the Philippines-Diliman. It features the Katipunan’s Gregoria de Jesus; Apolonia Catra who fought with Macario Sakay’s forces; Remedios Gomez-Paraiso a.k.a. the Hukbalahap’s Kumander Liwayway); Martial Law activist Lorena Barros; and slain Bataan coal activist Gloria Capitan. Alas ng Bayan is jointly organized by the Institute for Climate and Sustainable Cities, the Constantino Foundation, and 350 Pilipinas. For more information, visit alasngbayan.org.

Intel bets on smart buildings in Israel to attract tech talent

PETAH TIKVA, ISRAEL — Intel Corp. is investing heavily in “smart buildings” in Israel that will be full of perks to keep employees happy, helping the US chipmaker compete for the country’s top professionals.

Intel, one of the biggest employers and exporters in Israel, said in 2019 it would invest $11 billion to build a manufacturing facility in the country, where some of its most advanced technologies have been hatched.

Home to more start-ups per capita than any other nation thanks to its advanced military and government support, Israel is suffering from a shortage of talent. While multinationals like Intel, Apple and Google have snapped up local startups and set up research centers, competition is making it tough to find skilled workers.

Tech companies in Israel were unable to fill about 17,000 positions in 2018, according to Start-Up National Central, a nonprofit research organization, and that figure continues to climb.

To address this gap and lure talent, Intel has upped the ante at its new development center in the Tel Aviv suburb of Petah Tikva. Replete with environmentally friendly systems, a smart gym, massage parlor, the structure also has 14,000 sensors that monitor motion, light and air to make sure workers are comfortable.

If these efforts give Intel an edge in hiring, rival companies are expected to follow suit.

“Anything you offer as a perk, whether it’s a gym membership or a paperless work environment or additional days for maternity leave or a go-green policy, all of these things are going to help you,” said David Gantshar, chief executive of California-based Shepherd Search Group.

Intel’s box-shaped, 10-story building is covered in glass and will accommodate up to 2,700 of its local 13,000 workforce.

The company declined to comment on how much it spent on the development center. Israeli media reported a cost of 650 million shekels ($188 million).

David Hareli, deputy CEO of Afcon Holdings, which constructed the building, said it was a challenge to finish the project within Intel’s three-year timetable. Originally designed to be seven stories high, Intel asked to add three floors. Once the contract was signed, Intel asked for LEED Platinum certification, the highest standard of green construction, rather than the lesser gold level.

This required a double-skin facade to improve ventilation and prevent the building from heating up under the strong Middle Eastern sun.

Architect Dagan Mochli, who designed the building, said he was working on a new development center for Intel in the northern city of Haifa that will also be smart and LEED Platinum.

He called Intel’s building a “breakthrough,” with demand growing among clients for similar structures. He is planning a smart 15,000-square-meter banking campus in Israel as well as a 240,000-square-meter smart biotech park in China.

SMART TRAVEL
The building has an open-space format. An atrium in the center is roofed by skylights, and caps the five top floors. Health-conscious employees often use the internal stairs in the atrium instead of the elevator.

For those seeking seclusion, there are small soundproof rooms and noise-insulated armchairs near the windows.

The 14,000 sensors — twice the number found in similar buildings, according to company officials — detect when someone enters a room and adjust the lighting and air conditioning. For example, when carbon dioxide levels rise, fresh air is introduced to keep people energetic. The sensors and corresponding app can also help employees find the best way to travel to and from work and let them know which of the building’s three restaurants has room during lunch. The app lets workers alert other staff as to their whereabouts.

Not everybody was excited about the new workspace. Some employees anonymously complained on an Israeli news website about a lack of privacy. Intel Israel CEO Yaniv Garty said the tracking and collection of data is on an opt-in basis.

“We don’t ask people to clock in or clock out. We believe in a relationship which is based on output,” Garty said.

Ido Melamed, a hardware engineer who has worked at Intel for 16 years, moved to the new building from an office with cubicles. He said the benefits outweigh the disadvantages.

“We see each other, we can talk more openly and collaborate more effectively,” Melamed said. “There is real trust between the company and employees that the data (collected) is used for the right purposes.” — Reuters

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