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Flat-screen upgrade was `never an option'.

Byline: By Guy Anderson

Electronics group LG Philips tried to fight back yesterday against claims that an investment in flat-screen technology could have saved 761 manufacturing jobs in the North.

The Korean-Dutch electronics group said such an investment was "never an option," as it answered criticism from unions and MPs that it had failed to invest in new products at its Durham plant, leading to the factory's closure this week after 34 years.

Old style "fat" television tubes manufactured at the factory have fallen out of favour with consumers, who are moving towards the modern Liquid Crystal Displays (LCD) that are made in Asia.

The company said that the "market has beaten us," citing a sales fall of 40pc and "crippling price erosion" of 30pc for the decision. However the explanation was dismissed as "bunkum" by Davey Hall, regional secretary of engineering union Amicus.

Members of Amicus and Durham City MP Gerry Steinberg are expected to meet Prime Minister Tony Blair at Downing Street on Monday to highlight their concerns.

Mr Hall said: "If they had had the foresight to invest, then Durham could have been saved."

"It is easy for LGP to say this now, but there is no reason why they couldn't have invested in LCD in Europe years ago. They were slow to respond."

A spokesman for LGP argued that the cathode ray tube and LCD plants were managed by separate companies.

He said: "It has been suggested that the Durham plant of LG Philips Displays could have invested in new, flat screen TV technology to safeguard its future and the jobs of the employees.

"This was never an option because the plan's Cathode Ray Rubes are an entirely different technology to the flat Liquid Crystal Display screens. In addition, the two technologies are manufactured by separately managed joint ventures ( LG Philips Displays and LG Philips LCD ( which operate at arm's length from their parent companies."

LG Phillips invested pounds 14m over the last decade in improving production at the Durham factory; however pounds 5m of Government funding was paid over the same period.

The Regional Selective Assistance grant of pounds 4.2m in 1993 and a further pounds 900,000 in 1999 will not have to be repaid, the DTI said. The plant produced 2.5 million television tubes last year; a fall from a peak of three million.

The closure of the Durham plant with the loss of 761 jobs was the latest in a series of redundancies announced by LGP.

The electronics firm's Washington plant was the first to face the axe in 2002. More than 300 jobs were lost when the firm moved to Slovakia to take advantage of cheaper costs. The plant closed in October 2003 with all of the remaining 119 jobs going.

A leaked memo in September 2002 indicated LG Philips was considering closing its UK plants. Twelve months later, the factory at Newport in Wales closed with 870 jobs lost.
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Publication:The Journal (Newcastle, England)
Date:Mar 5, 2005
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