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Update: Fujitsu formally announces fab closure

Mandelson announces aid package

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Fujitsu has now formally announced the closure of its fab in Newton Aycliffe in the north east of England, barely six weeks since a Siemens fab in the area shut. Peter Mandelson, UK minister at the Department of Trade and Industry, announced a £100 million package to aid the region. The Fujitsu plant is in the constituency of Prime Minister Tony Blair. Mandelson said the money would be used in an attempt to find a new owner and assist the workers laid off. Fujitsu had said earlier this year that it would switch DRAM production to logic chips at the plant. Search on old site . Blair said he was saddened by the job losses. Around 600 jobs will be lost at Fujitsu, while the Siemens plant will account for 1,100 job losses. However, reports were circulating yesterday that STMicroelectronics -- formerly SGS Thomson -- could come to the rescue of the Siemens plant. The job losses at the Fujitsu plant further excaberate recent problems over inward investment. Yesterday, LG Semicon and Hyundai announced they would create a new merged chip company, and that could mean additional job cuts in the UK. Fujitsu blamed the closure of the state of the art complex on the poor state of the semiconductor market. Conservative opposition representatives cited the strength of the pound as a reason for the closure. That was echoed by a representative for the British Confederation of British Industry (CBI), who said that over 3,000 jobs had been lost in the region. Fujitsu is expected to announce it will repay the £100 million loan it received from the UK to set up the fab. Earlier in the week, Motorola shed 200 jobs at its plant in East Kilbride, Scotland. Questions may now be asked why Derek Fatchett, minister for the commonwealth and foreign office, announced last month that the UK would assist the Korean economy. ®

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