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Last Updated: Tuesday, 9 October 2007, 14:07 GMT 15:07 UK
Factory sale will cost 600 jobs
Atmel factory at Silverlink
The Atmel factory is expected to cease production by Spring 2008
More than 600 jobs are to go on Tyneside with the closure of an American-owned microchip plant.

Atmel is to sell its factory at Silverlink, North Tyneside, to a business park developer, with equipment going in a separate deal to Taiwan.

The company, which was promised almost 28m in government relocation grants, said in 2006 that the plant was likely to go because of planned restructuring.

19.9m in grants already paid will be returned, said a spokesman.

Atmel, one of North Tyneside's largest employers, received the public funding seven years ago, when it took over the site from Siemens.

I believe the workers of this plant deserved more from a company that has put shareholders before the loyalty they owe their workforce
North Tyneside mayor John Harrison

It was given the Regional Selective Assistance Grant by what was then the Department of Trade and Industry.

A spokesman for the Department for Business, Enterprise and Regulatory Reform (formerly the DTI) said it would seek to recoup the cash.

Atmel's North Tyneside managing director Craig McInnes said: "We have always made it very clear that Atmel would honour the terms of its contract with the UK Government.

"Atmel has already scheduled a meeting with the Government to begin the process of delivering on this commitment.

"This has been a difficult decision to take, and is no reflection on the highly-valued work performed by our employees, here in Tyneside."

Disappointing behaviour

The factory is expected to cease production in the spring of 2008.

The announcement was condemned by Tynemouth Labour MP Alan Cambpell who said: "'The future of more than 600 people, the victims in this, has been sealed by a commercial decision made thousands of miles away.

"Atmel's decision now and Siemen's before, shows how global decisions made thousands of miles away can impact on local communities.

"People will be asking whether it's not now time to look at what more can be done to encourage the development of local companies who are more loyal to our area."

North Tyneside elected Mayor John Harrison added: "I am disappointed at the behaviour of Atmel who, from California, took the decision to close this plant.

'Devastating blow'

"I believe the workers deserved more from a company that has put shareholders before the loyalty they owe their workforce."

Alan Clarke, chief executive of regeneration agency One NorthEast, said: "Today's announcement is very disappointing for the workers and the region. But ultimately, the sale of Atmel was a commercial decision taken by the company.

"We will be seeking assurances from the company regarding the new owners' intentions for the site."

Davy Hall, regional official of the Unite union, added: "This is a devastating blow for the region and for British manufacturing.

"These are high-quality jobs which are now disappearing."

Reaction to the planned closure

Furniture stores facing closure
20 Oct 06 |  England

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