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LG Electronics pulls final plug on Welsh investment
The imminent closure by LG Electronics of the plant manufacturing LCD monitors
in Newport, Wales sees the end of one of the U.K. biggest inward investment
The South Korean company is blaming rising costs and falling prices for the
closure of the facility, and the loss of 315 jobs. The company said it has
started the required consultation process with employees and union
representatives, and the closure is expected by the end of the year.
Production of the 100, 000 computer screens made at the facility each month is
likely to be transferred to factories in China and Poland.
In a statement, the firm said: "The decision to close was made with great regret
and is based solely on the current and external conditions within the
marketplace. We have greatly appreciated the hard work and commitment that the
employees at the plant have given us over the past nine years and are sorry to
see the plant close."
In July 1996 LG promised to create 6,100 jobs directly on the site, with
thousands more in related industries. The proposed £1.7 billion project was
hailed as one of Europe?s landmark investment deals.
But while the electronics factory went into operation, the proposed neighbouring
semiconductor plant remained empty. In 2003, production of colour tubes for
monitors and televisions, a joint venture with Philips, closed with 870 job losses.
The various factories and infrastructure for the site originally received £87
million of grant money, about £34 million of which has been repaid to the local
Brian Morgan, an economist at Cardiff Business School and chief economist for
inward investment at the Welsh Development Agency when the factory was set up
said the project was "doomed from the start". He said it was far too ambitious a
project. "It was a massive attempt to bring an electronics factory and
semiconductor plant to Wales and it never got off the ground."