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   Web Issue 3149 May 17 2008   
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Freescale sale plan runs into dead end
IAN McCONNELL, Business EditorMay 09 2008

Freescale Semiconductor conceded finally yesterday that it was "unlikely" to find a buyer to continue production at its East Kilbride fabrication plant - a view its employees have held since its plans to quit the site were revealed by The Herald 11 months ago.

The Texas-based, venture capitalist-owned company started briefing more than 1000 employees at the iconic East Kilbride site, which was established by Motorola in 1969, that "continuing efforts to market the fab as a going concern have not led to a sale".

A spokeswoman for Freescale at East Kilbride said about 750 staff were employed in the manufacturing operations at the site, and these workers are thus affected directly by yesterday's announcement. More than 100 other employees, who support the manufacturing operations, are also believed to be at risk.

The spokeswoman highlighted "continued operations", "expanded operations", and "closure" as the three remaining options for the East Kilbride plant. However, barring an astonishing last-minute turn of events, closure now looks inevitable given that Freescale's decision to try to sell the plant signalled clearly that production at East Kilbride is not part of its future strategy.

When it finally confirmed the appointment of real estate agent Colliers to market the site last September, in its first public admission of its plans to quit production at East Kilbride, Freescale cited the facility's sale as a going concern as its preferred option.

East Kilbride MP Adam Ingram, and his fellow Labour Party member and constituency MSP Andy Kerr, have been involved in trying to save jobs at the Freescale plant.

The spokeswoman emphasised yesterday that Freescale's "business groups" at East Kilbride, a term which takes in research and development staff, were not affected by the announcement about the fabrication plant.

It is believed that there are slightly more than 140 R&D staff at East Kilbride and that economic development agency Scottish Enterprise has been in discussions with Freescale in an attempt to ensure these posts remain.

It is believed that Freescale has, even as it has moved towards quitting production at East Kilbride, been recruiting R&D staff at this site.

Revealing Freescale's move to brief the various production shifts at the East Kilbride plant about the company's failure to achieve a sale of the fabrication facility as a going concern, the company spokeswoman told The Herald yesterday: "Freescale today informed staff in East Kilbride that continuing efforts to market the fab as a going concern have not led to a sale. Given that a sale appears unlikely, the company will now begin a formal consultation process with employees to consider further options for the facility and to seek their views on the future of the factory.

"We will continue to communicate with the Employee Forum and the entire employee population throughout the consultation process."

She told The Herald: "We did go into detailed negotiations with various parties but none of them led to a sale."

The spokeswoman added: "It is going to remain on the market. If anything did happen in the 11th hour, it is still for sale."

First Minister Alex Salmond had insisted in July last year, in spite of employees' own view that there was little chance of a buyer emerging for the site, that there was still a chance that manufacturing jobs at Freescale at East Kilbride could be saved.

Salmond said then that it was "far too early" to say that Freescale staff would be made unemployed and insisted everything was being done to protect their jobs.

He had added: "My officials are helping the company with their strategic plans and we're doing everything possible to retain and protect the jobs in Scotland.

"The firm have spoken to their employees in terms of their plans, but it would be far too early to write-off the manufacturing prospects of the company in Scotland."

The Herald revealed on June 8 last year that Freescale appeared poised to end production at East Kilbride under a secret project named "Claymore".

The Herald projected then that the research and development "lab" at East Kilbride, which is developing chips to support the next generation of broadband wireless connectivity, appeared likely to survive.

Freescale was spun out of Motorola in 2004 and taken off the New York Stock Exchange in late 2006 through a $17.6bn acquisition by venture capitalists Blackstone, Texas Pacific, Carlyle and Permira.


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Posted by: The Laird, Germany on 11:21am Fri 9 May 08
Yet another nail in the coffin for any form of hi-tech manufacturing in Scotland. Silicon Glen is no more, bereft of either indiginous or foreign mult-nats, the later having asset stripped and done a runner with taxpayers money years ago.

We are further under threat as there is a ground swell of large companies relocating to Ireland in relalation to HMRC increasingly obtaining powers and coming up with ill conceived and draconian measures which make UK based companies look for more business friendly locations.

SNP, please sit up and take note before it is too late.
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