North suffers huge blow as Seagate sheds 1,000 jobs

THE NORTH suffered a major economic blow yesterday when it was confirmed one of its “blue ribbon” technology companies was closing a plant with the loss of nearly 1,000 jobs.

US-owned Seagate Technologies told 768 permanent and 159 temporary workers at their Limavady factory in Co Derry they were being made redundant in the second half of next year.

The plant produces components for computer hard drives.

A second Seagate plant a few miles away at Springtown in Derry where 1,381 workers are employed is unaffected, said the company.

Staff were informed of the decision at a mass meeting held in a huge marquee specially erected outside the plant over the weekend.

Seagate said the plant was no longer competitive on the world stage.

Plant manager Dr William O’Kane said the company deeply regretted having to take close the facility.

He said: “We have made great efforts over the past few years to maintain the competitiveness of the Limavady facility but recent increases in global substrate industry capacity together with our competitors’ lower labour costs have made the Limavady operation uncompetitive.

“Foreign exchange movements, shipping and utility costs are also contributing factors.

“We have examined several options to maintain some or all of the Limavady facility but none proved financially viable.”

It is a serious blow to Northern Ireland where the power-sharing executive just last week launched its programme for government based around boosting the economy.

A target of creating 6,500 — mainly hi-tech — jobs over four years through investment by foreign companies was announced by Finance Minister Peter Robinson.

The Seagate plant is just the kind of hi-tech knowledge based industry the executive was seeking more of. Workers believe work is being switched to a new plant in Malaysia where labour costs are far less than in the North.

Seagate is currently the fourth largest manufacturing employer in Northern Ireland — pumping some £60 million (€86m) a year into the local economy.

The closure is a major turnaround on company plans less than two years ago.

In December 2005 Seagate announced an £83 million (€118m) investment in the two plants and the creation of 300 jobs.

The North’s jobs creation agency, Invest NI offered nearly £25m towards the expansion — money it will now be looking to get back.

Seagate was established in California in 1979 and now employs 55,000 people worldwide and last year had revenues of close to £5 billion (7bn).

Enterprise, Trade and Investment Minister Nigel Dodds said the closure decision was hugely disappointing for the workforce, the northwest and the wider economy.

Mr Dodds, who travelled to Limavady to meet management and the local mayor, said: “I have been assured that this decision is not a reflection of the performance of the Limavady plant or its workforce, but is a direct result of significantly lower wage costs in Asian competitors, foreign exchange and shipping costs which have created a competitive cost gap of some £15m per year.”

The minister’s department said the Seagate decision had not been known when the programme for government was launched on Thursday.

A spokeswoman said: “Seagate met with Invest NI on the afternoon of October 26 to inform them of the board’s decision to cease production at the Limavady plant.”

She said there had been a specific request the information was not disclosed until the workforce were told yesterday.