UK suffers as Fujitsu closes chip plant

The UK was dealt another blow today as two chip firms announced major job losses. Fujitsu confirmed it will close its production facilities in Newton Aycliffe, County Durham, at the cost of 570 jobs. Another 200 staff will be made redundant at Motorola's chip manufacturing plant in Glasgow.

The job losses are the latest in a succession of disruptions hitting memory chip manufacturers - the closure of Siemens' plant in North Tyneside was announced last month with the loss of 1,100 jobs. Motorola and Fujitsu said the weak global economy and the saturation of the DRAM market caused the closure. Fujitsu strongly denied the economic climate in the UK was an influencing factor.

A spokesman for the Manufacturing, Science and Finance union (MSF), said weak union laws puts the UK at a disadvantage to the rest of Europe, as it is easier to make staff redundant in the UK. But he added: "Next year the labour laws that existed under the conservative government will be changed and that will make it more difficult, but even then Britain will have the least employment legislation in Europe."

He added that MSF is particularly concerned about inward investment and it hopes to have a manufacturing investment taskforce in place before December. He said: "Manufacturing in the UK is on the verge of a real crisis."

A spokesman for Motorola said the Scottish job losses were part of a drive to reduce global capacity and staff. He added: "There was one part of the plant - the oldest line - which we would have phased out anyway and that has just been accelerated."