BAT shuts factory and cuts 550 jobs

The North-east was struck by its second mass redundancy in as many days yesterday as British American Tobacco said it would shut down a cigarette factory on the doorstep of Tony Blair's constituency.

The move will cost 460 jobs in Spennymoor, Co Durham, by the end of the year and follows British American Tobacco's June merger with Rothmans International. In total, 550 BAT jobs will be shed, with additional losses at other sites in Darlington, Southampton and Milton Keynes.

On Monday RJB Mining said it planned to close the North-east's last deep- level coal mine in Ellington, Northumberland, with the loss of 429 jobs.

The BAT/Rothmans tie-up left the combined group, which makes Dunhill International and Benson & Hedges brands, with three UK plants and annual capacity of 94 billion cigarettes. When the merger went through, it said it aimed to reap cost savings of pounds 250m over three years.

The company said: "All options have been examined, against a background of continuing economic difficulties in parts of the world, particularly Asia; trends towards local production in emerging markets; the loss of European duty free and a UK market increasingly affected by `bootlegging'."

Mike Mulhern, national secretary of the MSF, a union for skilled and professional workers, said: "We will be meeting the company and will make every effort to minimise the damage this closure will cause."

Stephen Byers, the Secretary of State for Trade and industry, announced yesterday the creation of a taskforce to explore measures for economic regeneration following BAT's announcement.

BAT shares ended 9.5p lower at 385p.