600 jobs to go at plant
Oct 9 2007 by Paul James and Andrew Mernin, The Journal
SIX hundred workers at a North electronics plant will lose their jobs in the New Year, it was announced last night.
Microchip giant Atmel delivered a massive blow to the region’s economy by confirming it has found a buyer for its factory next to the Silverlink retail park in North Tyneside.
The firm, which took over the former Siemens plant in 2000 after receiving £27.8m of public money, will sell the site to Highbridge Business Park, the developers of the nearby Cobalt Business Park. And Atmel has also agreed to sell off the factory’s water fabrication equipment to rivals Taiwan Semiconductor Manufacturing Company Ltd (TSMC).
In total the deal is worth $124m (£60.6m) in cash to Atmel, which announced in December last year it wanted to sell up.
Last night bosses said they expected manufacturing to continue into the New Year, when production is then expected to be transferred to its other operations in America and France.
In a statement to The Journal, Atmel’s North Tyneside managing director, Craig McInnes, said: "In December 2006, we announced that we would be seeking a buyer for the facility here in North Tyneside. Having reviewed the options open to us, we have today informed staff that Atmel has come to an agreement with TSMC and Highbridge Business Park Ltd to respectively acquire the facility’s wafer fabrication equipment and site.
"This has been a difficult decision to take, and is no reflection on the highly-valued work performed by our employees, here in Tyneside.
"Atmel has many hard-working, dedicated employees at the North Tyneside facility who serve our customers and our company admirably.
"We are committed to treating employees with respect and helping ease the transition for employees at the North Tyneside facility as production is concluded."
The sale follows that of Atmel’s wafer fabrication facility in Texas for £18.6m ($38m). The 600 hi-tech jobs at the factory, overlooking the A19, include around 20 staff with PhDs, 30 with masters degrees and 90 with ordinary degrees, along with several hundred who have HND level qualifications.
The site’s previous owner, Siemens, pulled out of the site in 1998 just 18 months after opening, leaving 2,400 redundancies in its wake. Atmel received a Regional Selective Assistance (RSA) grant of £27.8m to set up, and initially said it wanted to employ 1,300 people in North Tyneside. After the sale was announced 10 months ago, the DTI said it would look very closely at the terms of the grant, and whether it could be transferred to a new owner.
While bosses at the North Tyneside plant will now enter into a consultation process with staff, the company’s tone was more upbeat in a different media statement issued via its corporate website.
In it, Steven Laub, Atmel’s president and chief executive, said: "The sale of our North Tyneside facility is a major step forward in transitioning Atmel to a fab-lite manufacturing model, which will improve our cost structure and increase shareholder value.
"We are making measurable progress in enhancing Atmel’s competitive position as we implement our strategic restructuring initiatives and optimise our manufacturing capacity to improve Atmel’s financial strength."
The statement did mention outstanding debts Atmel has to clear, but did not specify if the figures included the grant.
It said: "The transaction is expected to be approximately neutral on a cash flow basis after the elimination of $35 million of debt and the recognition of other financial charges."
