Plymouth manufacturer may slash 70 jobs after management buyout
A PLYMOUTH manufacturer which was taken over by management last year to safeguard jobs has entered into redundancy talks with 70 workers.
Roborough-based Plessey Semiconductors has begun a 30-day consultation over the jobs of more than a third of its 186-strong workforce.
Plessey's director of finance Chris Bailey said: "We have just started the consultation process and we need to follow due process and see what alternatives might be possible."
Mr Bailey said the need to cut costs arose from market conditions.
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Plessey Semiconductors was created last December when Roborough's X-Fab plant was saved by a management buyout, protecting the jobs of 150 staff. Six of its management team linked up with five managers from Swindon's Plus Semi to take over both factories for an undisclosed sum.
The South West Regional Development Agency (SWRDA) subsequently agreed to inject nearly £1 million during the next three years to help the new operation to develop.
It is understood that silicon-wafer manufacturer Plessey expected contracts held at the time of the buyout to last until October, but work began to dry up in May.
Mr Bailey said: "We felt let down by that, but it's a fact of life.
"We are obviously working as hard as we can to build the business back up again.
"Basically, we are having to transition the business into something new."
Regional Unite officer Terry Keefe, representing workers at the plant, said that Plessey was currently negotiating over the 70 workers leaving before Christmas, on statutory redundancy pay.
Mr Keefe said: "They tried to put process in place to cut the business they do in Swindon and the work they anticipated when they bought the business dried up.
"With those two things put together, people could see that things were not great, but the redundancies have come as a shock."
Mr Keefe said there was a disagreement between workers and the company on the level of redundancy payments that would have to be made.
Plessey's three-year RDA-supported plan was to transfer its Swindon manufacturing technology to Plymouth, while retaining a staff of around 25 to concentrate upon R&D in Swindon.
SWRDA spokesman Billy McKenna said that Plessey has so far received £495,000 of its Business Investment scheme funds, adding that the manufacturer had fulfilled initial funding criteria in terms of rescuing the business and saving worker's jobs.
"At the time, it secured 151 jobs in Plymouth," he said. "It is now a different environment."
Around £435,000 RDA cash is still earmarked for Plessey until 2012, subject to certain criteria.
The manufacturer would have to invest £4 million into its fixed assets to secure the continued funding, return employment levels to the original 151 Plymouth staff it took on with its acquisition and create a further 17 jobs.