Jobs go as firm takes work back to Taiwan

Up to two thirds of the workforce at Lite-On, which makes computer monitors in a plant at Mossend in Lanarkshire, could be made redundant in a move which will have major repercussions for the Government's inward investment strategy.

There are fears it could also have a knock-on effect. It is linked on the site with the #260m Chunghwa picture factory, which is scheduled to create 3300 jobs.

Lite-On began production at its custom-built factory in March last year. Lured by a substantial aid package, the company promised to employ more than 1000 people, producing one million monitors a year.

However, it is believed the plant is making substantial losses, estimated to be about #7m a month, and the company wants to switch production back to Taiwan where monitors are being made more cheaply.

The pound's strength and economic recession hitting the Pacific rim are significant factors in the relatively high costs of production in Scotland. The other unanswered question is whether Taiwanese work practices are finding it hard to take root in Scottish soil.

The decision effectively to mothball production, which has not yet been announced to the company's employees, will be a major source of embarrassment to Locate in Scotland, the Government's inward investment arm.

It is understood the workforce, believed to number around 300, downed tools yesterday to try to get answers to the wave of rumours flooding through the plant.

Management, who had held a meeting about the plant's future, promised to make a statement today and work was resumed after 15 minutes.

Unconfirmed reports claim Lite-On may be considering replacing the monitor manufacturing and assembly process with a UK-wide repair centre. The company currently assembles monitors for IBM in Greenock, and Nokia. Lite-On's arrival meant the end of a lucrative monitor contract for Clairemont, a Scottish electronic company in Greenock.

The consequences of Lite-On's retrenchment is extremely significant for the 90-acre enterprise zone near the Eurocentral Rail Freight Terminal at Mossend. Lite-On was supposed to manufacture computer monitors from picture tubes produced at the Chunghwa factory only a stone's throw away.

However, if Lite-On cannot make its operation economically viable, serious questions will be raised over the sustainability of the Chunghwa operation, the biggest ever inward investment in Scotland, which is projected to create 3300 jobs. The first phase of the Chunghwa plant is still being commissioned, and Lite-On is being supplied with tubes from the Far East.

Also tied into the equation is the new #12m Allied Precision Co plant, on the same site, which is to supply metal components to Chunghwa.

Questions will be raised on how much Locate in Scotland paid Lite-On to lure it to Scotland, whether all grants have been paid or have strings attached and how much, if any, is recoverable.

Locate in Scotland last night appeared extremely reluctant to comment on the issue. A spokesman said: ''Locate in Scotland remains in close contact with the company as it has done since it came to Scotland. If the situation changes there will be an announcement in due course.''

This latest blow comes hard on the heels of the announcement earlier this year by Hyundai Semiconductor Europe that it was delaying construction work on its #2200m facility near Dunfermline, set to employ up to 2000 people, because of economic problems in South Korea.

The Taiwanese complex at Mossend, led by Chunghwa, was hailed as a new employment era for Lanarkshire, still reeling from the closure of the Ravenscraig steelworks and the loss of thousands of jobs in engineering.

The Lite-On project was launched in August 1996 with Chinese firecrackers and Highland dancing. Mr George Kynoch, then the Scottish Office Minister for Industry, enthused: ''This project has created tremendous excitement in Lanarkshire and will make an important contribution to the revitalisation of the local economy, coming as it does so soon after the Chunghwa announcement.

''With a total of #300m in investment and 4300 jobs, these two projects are a boost not just to the Lanarkshire economy, but to the Scottish economy as a whole.''

The timing of Lite-On's job cuts could not be worse for Locate in Scotland. The Scottish Affairs Select Committee has just launched a major inquiry into Scotland's inward investment effort.

Nobody was available for

comment at Lite-On last night.