CALL MEL LEW

IN THE beginning was Intel. Then, unto Leixlip, Co Kildare, came Hewlett Packard which is now operating a major plant just down the road from its multinational neighbour. Intel already employs 3,500 workers, and rising. Hewlett Packard expects to employ 2,000 by the year 2000. The future of thousands of workers now depends on how such major companies perform in the intensely competitive international marketplace.

Hewlett Packard, like many others in its sector, is experiencing some slowdown in growth this year. But its chairman and chief executive, Mr Lew Platt, believes the outlook remains promising. Profits will continue to grow, but only in single figures, he says. In keeping with the sector, the US multinational's profits growth has slowed from around 25 per cent in the first six months of 1996 to less than 10 per cent.

Mr Platt sees this trend continuing for the next six to 12 months. However, the company has managed to control its manufacturing costs and expenses. Margins have been very healthy and cash flow generation has been excellent, he says.

It is another reason why the Irish operation, which this week took on its 1,000th employee and is set to double this number by the end of the century, is very important to the group, he says. Hewlett Packard which has more than 600 facilities in 120 countries is involved in a wide range of electronics and computing businesses, ranging from diagnostic medical equipment to telecommunications equipment.

The manufacturing plant in Leixlip makes inkjet cartridges for HP's printers. It is an area of Hewlett's business which is booming and Leixlip is one of the group's biggest producers of inkjet cartridges.

In fact, he says the company is having trouble keeping up with demand and this is another reason why capacity - and the new plant - is so important. "You can imagine the problem of people buying a printer and not, being able to get an inkjet cartridge for it."

There is also, of course, a very good margin on the product. Industry sources reckon that it is up to 300 per cent.

Mr Platt says the company needed to expand and was most impressed with Ireland, where there was room to expand and a planning and political system which was positive.

Several countries were competing for the business. Ireland was chosen for "a whole host of reasons", he says. Backed by the IDA, HP has already invested £328 million here. Ireland is an easy country to do business in, he says. It also offers long term stability. "You have to be assured that you are not lured in by a low tax rate which is going to be changed in five years by another government," he says.

The country you choose also has to be an attractive place in which to live and do business - criteria which Ireland obviously fulfilled, he says.

"The rate of expansion in Ireland is unparalleled in the history of the company. Normally you build 170,000 square feet and then add another 170,000 in three or four years time, he says.

The total plant area exceeds 750,000 square feet on a 200 acre site. By anyone's standards, even HP's, it is a very large undertaking. It will involve taking on around 50 to 60 people per month until the year 2000.

Mr Platt sees the future for the Irish operation as "natural extensions" of current business.

"A lot of what's driving our business today is extensions of the inkjet business. "Inkjet printers started out as devices that put words on paper, black and white. Then we moved onto colour so that you could put colour diagrams, charts etc, along with black and white text.

"Now we are moving onto imaging, photographic images. This is a very natural extension to the business," he says.

The Internet has a major impact on HP's business. "It is a huge driver of demand for computers of all kinds and is certainly one of the very big drivers of the printing business," Mr Platt says.

"People are used to sitting down at computers, making their own images and printing them. Today more and more people are searching the Internet, finding images and printing them. So the Internet is enabling an explosion in demand for printing," he says.

"We plan to stick to the cartridge area. We definitely foresee further expansion from the plant. Right now we don't see departure from that business, through getting into other businesses."

However, he says with the size of the site, 200 acres, "you never can tell. Maybe at some point we will decide to put other HP businesses here."

The president of Hewlett Packard, which last year had revenues of £26 billion, is not slow to stress the importance of the company's "culture" and how it influences the way the company is run and decisions are made.

"We have a phrase we use inside the company," he says. "It's called next box opportunities."

It works like this: you make a list of all the things the company is doing, draw a box around it. "Rather than making a huge departure and going off and doing something else, we generally try to build capability in the next box and the next box," he says. "Historically, that has been HP's way of expanding and I don't see that changing very much."

Mr Platt says HP is a very decentralised, informal company which practices what he calls management by objectives. "We have this thing called the HP way," he says.

"Instead of having a lot of rules and regulations and manuals, we really spend a lot of time on culture with our people. Once they buy into the culture you expect that they will do the right thing and that does away with the need for a lots of procedures and thick manuals."

He describes HP's culture as "a very high degree of teamwork, integrity, trust. These are all words that you've heard about other companies. What's different about HP is that we really try to live them.

"Our values are written down, they were written down in the 1950s and they have been practised since the company was started. It's not something that is written down and stuck in the top drawer.

"Part of the lack of rigidity, the informality, and lack of procedures comes from starting with the premise that you can trust people. There is a tremendous premium put on trust and teamwork, working with your fellow employees."

Mr Platt says the HP culture is critical to the company's success. "We really do drive the company, not through a command and control structure, but through culture. It seems to work very well for us."

He is convinced that this exists in Ireland and that the Leixlip plant will excel, because of it. This week he paid his first visit to the Leixlip plant, spending several hours meeting employees and senior executives, before heading off to London. He had been in Ireland once before, but not on business connected to the plant, despite the huge financial commitment it represents for HewlettPackard.

"That's decentralisation," remarked one of his managers.