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The BBC's Stephen Evans
"Ministers will welcome the salvation of the Siemens factory"
 real 56k

Bill Midgeley, Vice Chairman, NE Regional Assembley
"There is a skilled labour force"
 real 28k

Monday, 18 September, 2000, 17:00 GMT 18:00 UK
Siemens plant to reopen
Siemens plant
The plant's closure was a huge blow to the region
Up to 1,500 jobs are to be created in north Tyneside over the next three years with the reopening of the former Siemens electronics factory in Wallsend.

An American company has agreed to buy the plant with the aid of a 28m Government grant.


This will be fantastic news for Tyneside

Sir Ken Jackson, AEEU
The factory had been mothballed in 1998, just 15 months after it was opened by the Queen, when business was hit by a sharp drop in world semi-conductor prices.

A task force was set up to try to find new owners and now California-based Atmel is to produce microprocessors at the plant.

Assistance

A regional selective assistance grant is being given to Atmel to help cover the costs of reopening and staffing the factory.

It is not clear how much Atmel is paying German firm Siemens to take over the disused business. One possibility is that it will lease the factory with an option to buy later.

Sir Ken Jackson, general secretary of the Amalgamated Engineering and Electrical Union, said: "This will be fantastic news for Tyneside.

"It is a region with highly skilled workers who will add value to this huge new investment.

"Full marks to [Trade & Industry Secretary] Stephen Byers for helping to regenerate the north-east economy."

The union's north-east regional secretary Davey Hall added: "It was a big blow when Siemens announced it was closing the factory so we welcome new investment with open arms."

Purchasing deal

The reopening of the factory is expected to create 600-700 jobs initially with prospects for about 700 more within three years.

By the time of the closure, Siemens had invested 1.7bn Deutsche marks ($742.4m) in the plant. And since then, the unit has cost the German firm millions more.

Siemens effectively exited the semiconductor business in March this year when it spun off its Infineon unit.

The deal with Atmel also includes a purchasing deal under which the US firm could supply Siemens with up to $1.5bn worth of microchips in the next four years.

Atmel said it would use the North Tyneside unit as a base from which to penetrate the European market.

"The signing of this supply agreement strengthens the relationship between the two companies. The venture... will help us grow our design and manufacturing presence in Europe," Atmel chief executive George Perlegos said.

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See also:

30 Aug 99 | Scotland
High-tech jobs boost for Scotland
30 Apr 99 | The Company File
Pay-back time for Siemens
04 Sep 98 | The Economy
The chips are down
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