Intel Israel said it will be cutting approximately 120 manufacturing positions at its microchip plant at Har Hotzvim in Jerusalem, which employs nearly 1,000 workers. The jobs were filled by workers employed via subcontractor Shamraz.
Intel spokesman Kobi Bachar stressed that the workers were hired for a temporary period only and that Intel never intended on keeping them on.
"The layoffs do not signal a decline in the company's fortunes -- just the opposite," he said. "We hired employees in 2002 and in 2003, we have fired no one."
Last week, Intel, the world's largest chipmaker, said it plans to invest about U.S. $600 million upgrading its Fab 18 plant in Kiryat Gat and is requesting a state grant of $120 million. The company employs approximately 5,300 people in Israel, plus another 2,000 via subcontractors.
In a separate development, Electra CEO Rafi Friedman said the company is in the final stages of laying off 68 employees, or about 20 percent of its total workforce of 350.
Seven will receive early pensions while the rest will receive enlarged severance pay. The main reason for the layoffs, he said, is growing competition from China, where labor is cheap. The company, therefore, plans to move the jobs to its own factory in China.
Mr. Friedman claims the company had no choice. "If a worker in Europe receives $18 an hour and a worker in Israel receives $8, then a worker in China receives $.80 an hour," he said. "It’s not just us -- everyone is doing it."
Mr. Friedman says that the American Frigidaire Company recently announced the closing of a 2,000-worker plant in the U.S. and is moving its facilities to China.
Electra has seven factories worldwide. "What we sell in Israel is manufactured here -- about a third of our overall sales," he said. "The other two-thirds, which we sell abroad, is manufactured overseas."
In spite of the move, Mr. Friedman said labor is not the most expensive cost in the manufacturing of the product, but rather raw materials.
Electra produces both air-conditioning units and elevator systems. (Reuters)
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