Sun, Aug 19, 2001 - Page 11 News List

US-based General orders the closure of factory in Ireland

AP , LONDON

Ireland's high-tech industrial sector suffered its second big blow this month when General Semiconductor Inc announced Friday it was closing its Irish factory at a cost of 670 jobs, or 13 percent of its work force.

General Semiconductor, based in Melville, New York, said it will shut its plant in Macroom in County Cork and transfer the bulk of the business there to factories in Taiwan and China where production costs are lower.

The announcement follows a similar decision by US computer maker Gateway Inc to shut its European headquarters outside Dublin and eliminate 900 jobs.

General Semiconductor company's Macroom plant makes diodes and other components for use by automotive and computer equipment makers. It was doomed by a weak global economy and an "unprecedented" decrease in demand, the company said.

"The semiconductor market's unprecedented downturn made the steps taken today a necessary business decision. Nevertheless, these choices are difficult for everyone involved," chief executive Ronald Ostertag said in a statement.

General Semiconductor made the move as part of a broader effort to slash costs at all its facilities worldwide. The company said it aims to reduce its total work force by about 23 percent from the 5,700 people it employed at the end of last year.

The announcement prompted Ireland's Deputy Premier Mary Harney to interrupt her vacation to return to the country for talks with workers affected by the closure.

"The least I can do in the circumstances is to meet with the employees of the company and express my solidarity with them, as well as to underline my absolute commitment to finding a new employer for Macroom as quickly as possible," said Harney, who also serves as enterprise, trade and employment minister.

"Recent job losses are not symptomatic of a deterioration in the competitiveness of Ireland's economy. I remain confident that the fundamentals of the economy are strong," she added.

Harney was already preoccupied with efforts to find jobs for workers set to lose their livelihoods at Gateway's computer assembly plant. But with high-tech businesses struggling with a nosedive in global sales, some analysts have predicted a wave of big layoffs at the mostly US-based technology companies in Ireland that until now have provided fuel for the island nation's rapid economic growth. High-tech businesses today employ 5 percent of Ireland's work force but account for one-fourth of its exports. Ireland's trade-dependent economy surged by 10.3 percent in 1999 and 11.5 percent last year.

However, slackening growth in Europe and the US means a slowdown is almost certain.

Charles Flanagan of Ireland's opposition Fine Gael party accused Harney of ignoring economic danger signs.

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