IBM raises job fears with manufacturing plant spin-off

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IBM raised the spectre of further job losses in Europe by spinning off four large manufacturing plants as businesses in their own right, writes Mary Fagan. The factories, including one at Havant in Dorset, will offer production and technology services and will be expected to generate revenues increasingly from outside IBM.

A spokeswoman for the company in the UK said: 'Obviously the future of the plants depends on their being successful and showing profitability.'

No time has been set for the experiment but a review of the sites is expected in about 12 months. According to the spokeswoman, IBM (UK) is optimistic about the outlook for Havant, which employs 1,500 out of a total UK workforce of 13,900.

The company said previously that it would shed 25,000 jobs this year including around 10,000 in Europe. About 40,000 jobs were lost last year. There is speculation that job losses will escalate following the recent appointment of Louis Gerstner as chairman and chief executive.

The other sites to be established as autonomous business units include a printer factory at Jarfalla in Sweden, the mainframe computer manufacturing plant at Valencia in Spain and a mainframe and silicon chip manufacturing plant at Montpelier in France. The Havant factory in the UK makes computer storage devices.

Last year, IBM (UK) made a loss of pounds 616m and saw exports fall for the first time. Nick Temple, the company's chief executive, warned that 1993 would also be a difficult year.