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Textile Mills Face Shutdown Unless It Receives a $10 M Government Grant

The Ata textile mills, which employ over 3,000 people in Haifa and other parts of northern Israel, has asked the government to bail it out of its current financial difficulties. David Arbell, general manager, told the Haifa Labor Council yesterday that unless Ata receives a $10 million grant from the government it will be forced to shut down.

According to Arbell, shareholders are ready to invest another $4 million to keep the plants going, but only if government aid is forthcoming. The prospect that one of the country’s largest private industries might go out of business sent shock waves through the labor market. Anxiety was registered in several new development towns in Galilee where much of the local work force is employed by Ata.

The company has been hard hit by foreign competition and the recent devaluations of the Shekel which have increased its Dollar loan debt by 30 percent. Ata workers have still not received their last month’s wages.

The management has blamed the influx of European imports, encouraged by Israel’s arrangements with the European Common Market. Israel’s textile exports have also suffered. One of the company’s major foreign customers, the Marks and Spencers department store chain in Britain, warned a year ago that it would give Ata two years to bring the quality of its products up to the standards of European and other competitors.

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