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Plant closure plan.

Byline: By Graeme King

Around 170 workers were yesterday told they were likely to lose their jobs with plans to shut a North-East factory and move the work to China.

Korean giant LG Electronics said it expects to close its Washington microwave oven plant in August after 15 years. The company had already shed more than 200 jobs at the site in the last four years.

Managers said that despite the plant being the most productive of its kind in the world it could not compete with far cheaper labour costs in China.

And they criticised the Government's lack of support for manufacturing, and its encouragement of investment in China ( the Washington plant's competition. Geoff Hood, the plant's head of human resources, said: "There has been a lot of emotion and a lot of tears. They are very, very good people here.

"I think the Government could have done more to help. We have lost the ability to think in the long term. Where are the jobs going to come from in the future? And our Government is encouraging people to go into China, encouraging them to invest.

"Ten years ago in the North-East, we had 80pc of the working population in manufacturing, in shipyards, coal mining. Now it's 13pc."

The company said it had begun a 90- day consultation with unions about "potential closure." But Carol McFarlane, from the Amicus union, said that closure was inevitable.

Managers said that the plant's workers were paid around pounds 250 a week compared with pounds 20 in China.

Earlier this month, electronics giant Cookson Fukuda announced it was to close its North Tyneside factory with the loss of 74 jobs. It also blamed competition from China and a global electronics market slump.

And in March, electronics company Circatex announced 350 redundancies at its South Shields plant for the same reason.

John Monks, general secretary of the European Trades Union Congress, was touring the LG Philips plant in Durham yesterday ( which is operated independently of LG Electronics.

"The future of manufacturing will be based on high value, expensive items, not mass production which countries with cheap labour can do," he said. "A big company like LG has a corporate plan, and there should be other options explored. The Government is too fatalistic about the future of manufacturing ( there should be pressure on companies to look up the value chain, so we don't just lose this highly skilled workforce."

Margaret Fay, chairwoman of One NorthEast, said: "We are in discussions with LG management. Clearly it's an incredibly worrying time for the employees ( that's what we need to concentrate on.

"The North-East, like the rest of the UK, is susceptible to global pressures. We need to move up the value chain in the products we supply."
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Title Annotation:Business Local
Publication:The Journal (Newcastle, England)
Date:May 26, 2004
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