BELEAGUERED US electronics firm Atmel will repay a multi-million pound Government grant after announcing the closure of its North Tyneside plant and axing around 600 jobs.
The microchip manufacturer confirmed yesterday that it was transferring its business to sites in France and America.
When bosses moved into the former Siemens plant on the Cobalt Business Park seven years ago it was promised public funding of around £28m in the form of a Regional Selective Assistance Grant from the then Department of Trade and Industry. The cash, awarded over a number of years, was given to Atmel to ensure business and development within the region and so far £19.9m has been awarded.
Last night a spokesman for the now Department of Business, Enterprise and Regulatory Reform said it would seek to recoup the cash and that this has already been promised by bosses at the American-based company.
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.”
Yesterday North-East industry bosses met with chiefs from Atmel to discuss plans to help workers back into employment when gates finally close at the end of January 2008.
A specially-created response group which is to be led by North Tyneside Council has now been set up to offer services to hundreds of workers.
Representatives from regional development agency One NorthEast, JobCentre Plus, Business Link North East and the North East Chamber of Commerce have also signed up to the board.
It will provide a tailor-made package of support to every worker to give them the best possible chance of finding new work.
This includes identifying retraining opportunities, helping them access job vacancies and providing benefits advice.
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'It always happens before Christmas'
WORKERS told of their disappointment last night after Atmel pulled the plug on its operations in North Tyneside.
Employees told The Journal they had been briefed not to talk to the media. However one insider, who remembers months of uncertainty when Siemens announced it would be leaving the North-East, said it didn’t come as a surprise.
The worker said: “It wasn’t entirely unexpected as they have known from last December that the land was up for sale. Rumours have been rife for weeks because the MD has been in the States.
“It’s a shame we had to find out in the media rather than from Atmel itself. They told the night-shift the night before news broke but that isn’t the majority of the workforce at all.
“Everyone is gutted because we have had this situation before. As usual it comes just before Christmas so it’s the workers with young families that are going to be worse off.
“It’s just sad news because everyone has worked so hard.”
Another worker, who has been with the firm for four years, said: “I’m devastated, we knew it was going to happed but we don’t even have a union.”
Alan Campbell MP for Tynemouth said this was a prime example of how global decisions made thousands of miles away can impact on local communities.
He said: “The decision by Atmel last year not to make wafers in the future but become a purchaser of them, held out the prospect of another company to take over the fabrication. That hope appears to have been dashed. People will be asking whether its 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.”