Is Motorola quitting Arad?

Speculation over plant's closure reaches Labor Ministry.

Motorola 58 (photo credit: none)
Motorola 58
(photo credit: none)
Confusion surrounds the future of the Motorolamanufacturing plant in Arad. For the past week media reports have beenwarning of closure of the town's second largest employer, but onWednesday the company said it would not be closing the factory andrather will be introducing new production lines to the plant.
Whilethe Arad plant, which manufactures mobile phones, car phones andradios, has been gradually downsizing its labor force for the last twoyears, a report last Friday stated that the company was consideringshutting down the production facility and moving operations to China. Areport in Friday's The Marker stated that the company's president,Elisha Yanai, had approached the government, requesting that theyprovide tax relief for the parent company Motorola International inexchange for keeping the Arad plant open.
Since then there have been multiple reports in the mediaspeculating that the plant would either be closed or sold to a foreigncompany and that the 500 employees would either be fired or forced tobecome external contract workers.
The rumors became so pervasive that politicians decided to take action to prevent the plant's closure.
OnMonday, Likud MK Carmel Shama and Israel Beiteinu's Alex Miller calledfor an immediate debate on the matter in the Knesset's FinanceCommittee. A press release presented by Shama read: "It is in the cleareconomic interest of the State of Israel to keep the Motorola plant inexistence; therefore, if it is necessary to provide the factory withextra ordinary benefits, we should all enlist and do everythingpossible to prevent its closure. Together with the members of theKnesset I plan to use all the parliamentary tools available to save thefactory from closing."
Arad Mayor Gideon Bar Lev said the plant's closure was not justArad's problem, but a national problem. "The state should do everythingpossible in order to make sure that Motorola doesn't leave," said themayor in a phone interview.
Bar Lev explained that the problem was a drop inthe number of orders the company was receiving and the crisisaccompanying the fall of U.S. currency rates. "All the hi-techcompanies are in the same boat in this," he said.
Bar Lev said that he had approached the minister of finance andthe Prime Minister's Office, but that ultimately the solution wouldhave to come from the Ministry of Industry, Trade and Labor. "Iapproached them too and told them they had to come up with an offer toconvince the company to stay. Motorola employs 400 people, 65 percentof them Arad residents.
"It also provides for nearly 1,000 families who are employed bysecond-layer contractors and helps us out with aid to the community.Losing it would be very bad for the city," said Bar Lev.
The ministry told The Jerusalem Post that a request forresponse had come from the mayor, but offered no solution, saying thatthe ministry was "studying the matter."
Motorola Israel is now downplaying the issue. On Wednesday thecompany's spokeswoman released the following statement: "Contrary towrongful reports in the media regarding the closure of the factory inArad, Motorola is clarifying that there is no basis to the reports. Onthe contrary, the company is looking into several options forincreasing the activities of the plant, which is without a doubt one ofthe best of its kind in the world, which employs skilled personnel andis based on the most advanced technologies. Among other things,Motorola is considering introducing new producers that will increasethe product basket and production capacity in the Arad factory, as wellas in the labor force."