Blow to Tyneside as Siemens rules out bid for Parsons

Siemens, the German industrial giant, yesterday dealt a double blow to job hopes on Tyneside. It emerged that Siemens has ruled out any possibility of bidding for the Parsons steam turbine business put up for sale by Rolls- Royce, and confirmed recent reports that it was delaying plans to expand its high profile computer chip plant.

The news about Parsons is likely to stun its 1,700 employees and unions, who had believed Siemens was one of the companies negotiating to buy the company. Protective redundancy notices were served on the workers' last month and also on a further 500 staff in Rolls-Royce's large boiler-making factory at Derby, which is also earmarked for sale or possible closure. The group has already put aside pounds 70m to cover redundancy costs out of total write-offs for the two plants of some pounds 250m.

Parsons is one of the most famous names in the heavy engineering industry, and is best known for developing the first steam turbine technology late last century. In recent weeks John Rose, chief executive of Rolls-Royce, is understood to have suggested privately that several companies were undertaking a due diligence review of Parsons with the possibility that there could be competition to buy the plant.

However, a source close to Siemens said yesterday: "This business is covered in red ink. They may sell it in pieces, but I don't see much chance of selling it as a whole. There's just too much overcapacity in the industry. People are closing factories rather than buying them, and small players like Parsons are being squeezed out."

Unions have been lobbying the Rolls-Royce board to keep the factory open but even senior managers based at the site have been kept at a distance from confidential discussions with interested parties. However, Chris Avery, an aerospace analyst with the French banking group Paribas, suggested the news from Siemens was not necessarily terminal for Parsons.

He said: "I still believe that there are several other companies which are currently very interested in Parsons. And the lack of interest from Siemens doesn't worry me too much."

The most likely bidders for all or part of the company are thought to be industrial power businesses from the Far East looking to gain a foothold in Europe, although a European group could buy the factory as a defensive move to block a potential Asian bidder.

Meanwhile, Siemens said it was delaying development of its high profile computer chip plant due to the world-wide collapse in semiconductor prices.

The pounds 1.1bn investment was originally planned to create 1,800 jobs with work due to be completed in two phases. However, almost as soon as builders arrived on the site, Siemens put its entire semiconductor operations under review as the price of some computer chips crashed by 80 per cent.

Heinrich von Pierer, Siemen's chief executive, said yesterday that the original timetable for the second phase of the north Tyneside site, which had always depended on future market conditions, had now slipped. He explained: "I don't know when we are going to start the next phase. The semiconductor market is really down at the moment so it does not make sense to build up further capacity".

The company refused to be drawn on a likely start date, though one source suggested it could be delayed beyond 2000 and could even be pushed back as far as 10 years from the start of work on the first stage of the factory.

Sport
sportGareth Bale, Carl Froch and Kelly Gallagher also in the mix for award
News
Japan's Suntory Beverage & Food has bought GlaxoSmithKline's Lucozade and Ribena
news
News
A tongue-eating louse (not the one Mr Poli found)
newsParasitic louse appeared inside unfilleted sea bass
Sport
Nathaniel Clyne celebrates after salvaging a point with the Southampton equaliser
footballAston Villa vs Southampton report
PROMOTED VIDEO
Life and Style
Out and about: for 'Glee' character Bert Hummel, having a gay son was a learning curve
lifeEven 'cool' parents need help parenting gay teens
News
peopleJack Monroe accuses David Cameron of 'misty-eyed rhetoric'
News
The illusionist believes hypnotism helped him to deal with the lack of control he felt growing up
people
News
Tana Ramsay gave evidence in a legal action in which her husband, Gordon, is accusing her father, Christopher Hutcheson, of using a ghost writer machine to “forge” his signature
peopleTana Ramsay said alleged discovery was 'extremely distressing'
Arts and Entertainment
Robin Windsor and Aljaz Skorjanec rehearse their same-sex dance together on Strictly Come Dancing
TV
News
ebooksNow available in paperback
Money
Anyone over the age of 40 seeking a loan with a standard term of 25 years will be borrowing beyond a normal retirement age of 65, and is liable to find their options restricted
propertyAnd it's even worse if you're 40
Arts and Entertainment
Perhaps longest awaited is the adaptation of Jack Kerouac’s On the Road with Brazil’s Walter Salles directing and Sam Riley, Kristen Stewart and Viggo Mortensen as the Beat-era outsiders
books
Arts and Entertainment
theatreSinger to join cast of his Broadway show after The Last Ship flounders at the box office
Life and Style
fashion'To start singing with Pharrell is not that bad, no?'
News
news
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Argyll Scott International: Risk Assurance Manager

Negotiable: Argyll Scott International: Hi All, I'm currently recruiting for t...

Argyll Scott International: Business Analyst - MGA - London Market - Insurance Broker

£50000 - £60000 per annum + benefits: Argyll Scott International: A Business A...

Ashdown Group: PR, Marketing & Events Executive - Southwark, London - £35,000

£30000 - £35000 per annum + benefits: Ashdown Group: PR Marketing & Events Exe...

Selby Jennings: C++ Developer – Hedge Fund – New York

$80000 - $110000 per annum, Benefits: Bonus and Employee Investment Scheme: Se...

Day In a Page

In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

Iran is shifting from pariah to possible future policeman of the Gulf

Robert Fisk on our crisis with Iran
The young are the new poor: A third of young people pushed into poverty

The young are the new poor

Sharp increase in the number of under-25s living in poverty
Greens on the march: ‘We could be on the edge of something very big’

Greens on the march

‘We could be on the edge of something very big’
Revealed: the case against Bill Cosby - through the stories of his accusers

Revealed: the case against Bill Cosby

Through the stories of his accusers
Why are words like 'mongol' and 'mongoloid' still bandied about as insults?

The Meaning of Mongol

Why are the words 'mongol' and 'mongoloid' still bandied about as insults?
Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible