Siemens risks grant repayment

Hardware DTI may call in loans given to hardware manufacturers if job creation targets in UK are not met.

Overseas hardware manufacturers with UK plants face losses worthf job creation targets in UK are not met. millions of pounds in grants, if they fail to meet targets for job creation.

Peter Mandelson, secretary of state for the Department of Trade and Industry, has warned Siemens Microelectronics subsidiary that unless a buyer is found for its Tyneside branch, its grant of #44 million, of which the vendor had received #18 million, will have to be repaid.

The recovery of funds by UK development agencies co-incides with 262 job losses from Seagate Technology's Livingston branch, after it stated it was 'no longer financially prudent to run the plant', unless a buyer is found by February 1999 (PC Dealer 4 November).

Both Siemens Microelectronics and National Semiconductors received Regional Selective Assistance (RSA).

A DTI representative said the DTI agreed a #25 million grant to Siemens, but that funds would be reclaimed if no buyer is found.

Llew Aviss, personnel director at Siemens Microelectronics, confirmed the company had received RSA as well as local assistance.

A government source said: 'Grants are provided if employment opportunities have been achieved. Companies are not presented with a blank cheque.'

National Semiconductors will shed 600 jobs but will maintain 400 staff by launching part of the wafer manufacturer as an independent business.

#3.2 million of a #4 million grant has been paid.

Locate, the inward investment arm of Scottish Enterprise stated: 'All offers of RSA are subject to clawback conditions.'

But one source said: 'To create jobs, it would be better not to withdraw funding if the company was working to keep it going.'

Seagate Technology was unavailable for comment.