Lights off in Lanarkshire

Last night, the Government and Locate in Scotland - whose taxpayers' package lured the firm less than a year ago - played down the embarrassing losses and potential knock-on effects.

However, furious workers insisted the project had been ''ill-thought out'' and the #40m manufacturing plant had ''turned sour after the money ran out'' because of broken promises. A union also raised the spectre of 1000 more redundancies elsewhere.

At Lite-On, 230 out of 350 jobs will go, with production lines cut from three to one.

The firm reaffirmed its commitment to Lanarkshire and pledged to restore full capacity when market conditions allowed. Mr Martin Togneri, director of Locate in Scotland, was also bullish. He said there would be ''no change'' to an inward investment strategy aimed in bulk at the Far East, despite the turmoil in Tiger economies - underlined recently by Hyundai, of Korea, delaying a #2200m semiconductor plant near Dunfermline.

Mr Togneri said: ''It's very unfortunate for the people being made redundant However, no way does the reduction in scale, in an otherwise bouyant market, reflect on the wisdom of our inward investment strategy.

''The outlook is healthy, although we cannot be insulated from upward - or downward - movements in markets.''

Mr Togneri warned that inward investment from Korea and Japan would be ''very weak'' from now but claimed interest from Taiwan remained strong. He added: ''There is no reason to turn away from the Far East. We will not change.''

Former LiS boss Robert Crawford, headhunted by financial advisers Ernst and Young to front their foreign direct investment practice, also supported the strategy. He said: ''Development agencies have to pursue countries like Korea and Taiwan and the strategy has been enormously successful.

''Scotland has a huge share of foreign firms and they have transformed Lanarkshire after Gartcosh and Ravenscraig.

''I am amazed Scotland has had so few setbacks because, no matter how good you are, it is unavoidable that some companies will run into problems in their markets and downsize.''

Events moved swiftly following The Herald's exclusive report yesterday that Lite-On, which produces computer monitors at Mossend, was in trouble. Scottish Industry Minister Brian Wilson tried to allay fears by stressing ''nothing has been finalised, no decision has yet been taken.''

However, by 3pm, it was clear eleventh-hour bids by the Scottish Office, LiS, and Lanarkshire Development Agency to soften the blow had failed.

Lite-On has already received #2.7m of #5.5m in Regional Selective Assistance and benefited from major tax breaks in an Enterprise Zone. Should the firm renege on alternative uses for the plant, Scottish Secretary Donald Dewar may decide in a matter of months to ''claw back'' cash already paid and to block further payments.

Lite-On announced there would be a ''significant reduction'' in the workforce, although Scotland was not singled out: operations in Asia will also be reduced because of a ''deteriorating competitive position''.

A spokesman admitted targets had not been met and added: ''We are left with no other option than to concentrate on maximising the efficiency of the remaining production line. By doing so, we will ensure the plant is in best possible condition to take advantage of an upturn expected within the next 12 months.''

It was hoped to introduce a new service and repair function at Mossend and to examine the possibility of manufacturing a new product.

It would appear repercussions for nearby Chungwa Picture Tubes - set to be a major supplier of picture tubes for Lite-On - will be less than feared.

A spokesman said: ''Chungwa is unaffected by the situation.'' He added: ''Already for 1998 we have orders for 600,000 television tubes and we are looking forward to building up production.''

Chungwa, also Taiwanese, has promised 3300 jobs, has 900 on site, and aims to recruit further ''over the next few months''.

However, the Amalgamated Engineering and Electrical Union fears thousands of Scottish jobs are at risk. Regional secretary Danny Carrigan said: ''This is a devastating blow. It is particularly worrying in view of what happened with Hyundai in Fife. I will be raising the matter with the Industry Minister.''

Scottish Conservative industry spokesman Alistair Jack blamed the crisis on the Government's ''mismanagement of the economy.''

He said: ''It's just 12 months since they inherited the best set of economic circumstances ever bequeathed to an incoming administration and already they are well on the road to dismantling much of the success story we created. Labour are throwing away our golden legacy.''

SNP industry spokesman Alasdair Morgan said it was a ''desperate blow'' for Lanarkshire but added Lite-On's problems were outwith the control of LiS.

Liberal Democrat spokesman Donald Gorrie described the job shedding as a devasting, bitter blow: ''The truth is, as long as the Scottish economy is over dependant on inward investment, businesses like Lite-On will be at the mercy of the strong pound and forced into job losses.''

Local MP John Reid will meet management today, then see Mr Wilson - who will be in Bellshill to launch a derelict land strategy.

Mr Wilson said LiS would continue to work with Lite-on to ensure its long-term commitment, put at 1000 jobs. He said: ''I regret market conditions have made these job losses necessary. However, it is essential the decision is kept in perspective.

''Just as indigenous companies which compete in global markets can run into difficulties, it is inevitable there will sometimes be set-backs involving companies which have come to Scotland as inward investors. It would be naive to suppose we are immune to events in the Far East. However, none of this should detract from the wider picture of inward investment as a crucial success story for the Scottish economy and I will continue to give full backing to the work of LiS.''

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