National Semi to cut Scotland jobs

In an effort to curb excess costs, National Semiconductor said it will
consolidate its wafer manufacturing operations in Greenock, Scotland,
eventually resulting in cuts in the workforce there.


One manufacturing line will be closed and consolidated into the remaining
line, with the company expecting that employment at the facility will
decline from 1,000 to 400 starting in March of 1999. Some employees will be
transferred to other manufacturing facilities, but the company did not
state how many might be affected.

The consolidation will result in a one-time charge of $25 million for the
quarter ending November 29, 1998.

The news of the consolidation came yesterday, the same day the Wall Street Journal
reported ongoing safety issues at the plant, including allegations of
chemical releases and lax safety procedures that may have led to high rates
of health problems among the plant's current and former workers.

National said it still has plans to seek investors who are interested
in running the facility as an independent chip foundry.

National reported a smaller-than-expected quarterly loss for its fiscal
first quarter earnings last month, saying that the company's downturn was
showing signs of bottoming out. Still, National said its chip plants were
running at 41 percent of capacity, far less than its target of 85 percent,
which is putting a squeeze on profit margins.

"We currently have the equivalent of one factory too many to meet
the business level of the next four to five years," said Brian Halla,
president and chief executive officer of National Semiconductor in a
statement. The
consolidation is "a direct result of continuing softness in the
semiconductor market and of factory utilization rates below 50 percent," he
added.

National has been hurt by lost market share in the analog and networking
industries this year, and production problems with its recently acquired
Cyrix chips also continuing to dampen the company's profitability.

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