Brown jobs pledge looks hollow as 700 staff face dole

• Jobs disaster for Scotland as computer firm quits the country

• 700 to go as production is stopped

• Losses may have crucial impact on forthcoming Dunfermline by-election

Key quote

"We truly regret the loss of jobs in this community. While we do not have the ability to change the impact of technology or economics, we nevertheless recognise the challenges facing our employees and their families." - Alan Spiers, general manager of Lexmark

Story in full

GLOBAL computer firm Lexmark yesterday announced that it was stopping all production in Scotland with the loss of 700 jobs - dealing a body blow to the economy and sparking the latest twist in what is now a crucial by-election for Labour in Dunfermline.

Workers expressed their outrage and dismay after being told that 500 of the Fife jobs will go within three months, with the rest axed by the end of the year.

Alan Spiers, general manager of the United States giant, said: "We truly regret the loss of jobs in this community. While we do not have the ability to change the impact of technology or economics, we nevertheless recognise the challenges facing our employees and their families."

But Lynn Geddes, 26, from Rosyth, who has worked at the plant for six years and is due to go on maternity leave on 6 March, expressed the views of many workers when she told of her shock at the decision. She said: "I went to work at 7am and was told that we had a meeting at 11.50. We didn't know what it was about and only found out when we got there.

"I'm in absolute shock and don't know what to say. I'm very upset and concerned. We've been sent home until Thursday and I've to finish by May."

Lexmark was championed as an inward investment success story when it was brought to Scotland in 1995 with 5.6 million of government inducements.

Over the next few years, Lexmark was paid another 5.9 million and then a further 275,000 in government grants to expand production.

But the company has now decided that a combination of falling demand for inkjet cartridges and the high costs of manufacturing in Scotland make the Rosyth plant unsustainable.

Some of the products made in Fife will be discontinued while the manufacture of other lines will be moved to the Philippines and China, where the labour costs are cheaper.

The closure came on the day that Lexmark announced quarterly profits of $82 million (46 million) and its share price rose by 12 per cent on news of the "global restructuring", the biggest part of which was the Rosyth closure.

The Chancellor, Gordon Brown, launched Labour's by-election campaign this week with a pledge to create 10,000 jobs in the area over the next decade - a promise that now appears to be doomed.

It is understood that Mr Brown knew about the Lexmark intentions to "restructure" the company when he was in the constituency, but made no reference to it.

Instead, he tried to turn attention on to other issues, including the long-running controversy over tolls on the Forth Bridge and his plan to bring a 30 million business training college to Dunfermline.

Labour is defending an 11,000 majority in Dunfermline and West Fife on 9 February, a majority which appeared impregnable before this week. But anger over the job losses at Lexmark, as well as the row over the Forth Bridge, is expected to turn many voters away from Labour.

The cuts are part of plans to shed about 1,400 jobs. Some 300 posts will go at the firm's US headquarters in Kentucky, with the remainder in France, Mexico and at Lexmark's UK headquarters in Buckinghamshire, which employs about 100 people.

The Lexmark job losses cap a dismal month for manufacturing in Scotland and represent the latest chapter in a depressing trend of jobs losses, particularly from foreign firms with plants in the country.

On 6 January, US-based Sanmina-SCI told staff that it was closing its computer plant in Greenock, with the loss of about 300 jobs. On 10 January, Inventec Scotland Servers announced that it will be ending its operations at Hillington near Glasgow later this year, with the loss of about 370 jobs.

At least 1,500 people in Scotland have been told they will lose their manufacturing jobs just since the start of this year, a statistic which will call into question the insistence by Jack McConnell, the First Minister, that the economy is improving.

Fife Council, Scottish Enterprise and the Scottish Executive yesterday all promised help to find work for the redundant workers, but this was overshadowed by the sense of anger in the community at what was seen as a betrayal by the computer giant.

Lexmark has been given about 12 million in regional selective assistance since 1995 in a series of sweeteners, encouraging the company to open a factory in an area hit hard by the closure of coalmines and other traditional industries.

It is understood the company will pay back about 275,000 of this money but it will be allowed to keep the rest of it, having employed so many people in the area for the past ten years.

Catherine Stihler, the Labour by-election candidate, said the plant's closure was a result of having to compete with "low-wage economies", not a reflection on the workers' skills.

But opposition parties turned the Lexmark closure into a by-election issue, accusing Labour of failing to do enough to protect the workers.

Nicol Stephen, the enterprise minister, said: "This is extremely disappointing news and a very severe blow to the individuals and families affected. We understand that this decision has come about due to pressure to reduce costs worldwide.

"I have spoken to the company and have asked the local enterprise company to head up a rapid reaction team to support the workforce."

'Cuts were coming, but this is shocking'

AS A cold wind swept over the hill on which Lexmark's Dunfermline plant was opened with such pride ten years ago, employees huddled in a nearby pub to speak of their anger over the news of its imminent closure.

At the Gladyer Inn, Derek Minty, 40, said that Lexmark staff were called to a full meeting at noon yesterday and were told by Alan Spiers, the general manager.

Employees knew the company was considering cuts, but no one thought the whole plant would go.

"I'm 40, at a stage of my life where I will be struggling," he said. "There are others who are far worse off. There were husbands and wives who worked together at Lexmark. It's not a good day for Dunfermline.

"We all knew that there were going to be cuts. Last October they cut the shifts from 12 hours to eight hours.

"But they kept telling us how they wanted to be the best company in Scotland. So when they brought us in and told us the whole place was getting shut down I think it shocked everybody."

Mr Minty wondered how voters for the upcoming by-election in the Labour stronghold would react after such a blow to the community.

He said: "Lexmark was getting government grants for ten years. It was set to expire this year so you have to wonder whether the government is partially responsible. There are a lot of people angry about that. I think it might change the way people vote in the by-election, but I think I'll continue to vote Labour."

Speaking outside the plant, Dave Ritchie, a Lexmark shipping controller, said the redundancies left a feeling of "doom and gloom".

Asked whether he felt Labour was to blame, he replied: "If it's going to happen, I don't suppose who is in charge in this constituency matters one bit.

"It was a decision co-ordinated across a global network."

EBEN HARRELL