Tower Semiconductor Ltd. (Nasdaq: TSEM; TASE: TSEM) CEO Russell Ellwanger has accused the Israeli government of reneging on a promised grant. "We are talking about $45 million that we were meant to receive - a rebate of 20% of investments already made."
Ellwanger told Globes, at the end of a difficult day in which he had parted with 200 employees in Israel and an additional 80 in the US, that "More or less 100 of the people that we fired today were laid off through the realization of synergies and cancelling duplications following our merger with Jazz Semiconductor. We were forced to part with 100 additional employees because of the global economic situation, but these layoffs could have been prevented if the government had stood by its commitments to us.
Tower, which this morning confirmed the layoffs, has issued a statement to its shareholders explaining the measure. In the statement, the company pointed an accusatory finger at the government, and said that it had petitioned the High Court of Justice regarding the grants that it claims to have been promised in the past.
Ellwanger himself did not refrain from using harsh language. "The government claims to work on behalf of the people, but in actual fact does nothing. We are one of the largest employers in the north of the country. Tower received a written and verbal commitment regarding these grants, before I took up this position. It is very difficult to justify special budgets of for a 'small' company like Intel, while a 'giant gorilla' like Tower doesn't get what it has been promised."
Published by Globes [online], Israel business news - www.globes-online.com - on December 2, 2008
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