Union officials fear Timex plant will close: Negotiations with American owners of factory break up as president of firm hands in resignation 'entirely voluntarily'

THE TIMEX plant in Dundee, scene of Britain's ugliest industrial dispute of recent years, is likely to close by Christmas, union officials said last night.

Fresh talks with the factory's American owners began, and soon broke up, only hours after the resignation of the head of the factory.

Union officials said that, even if they accept a tough new back-to-work formula, there is 'a 90 per cent likelihood' of closure by Christmas. The talks will resume today, but with little hope of settlement.

Peter Hall, president of UK Timex Electronics, was said by a company spokesman to have left 'entirely voluntarily' and for private reasons.

Speaking from his home in Godalming, Surrey, last night, Mr Hall said: 'It's been a hard six months and I am looking forward to a break and a bit of time with my family.'

One national union leader said closure would be 'a Pyrrhic victory, but victory nevertheless' because it would serve as a warning to other employers that they could not unilaterally reduce pay and conditions. The dispute began in February after 340 workers were locked out and sacked after going on strike. The sacked workers, replaced by raw recruits hired locally, recently rejected an offer of reinstatement on condition they accepted reductions in wages and inferior working conditions, which they said amounted to a 27 per cent pay cut. The formula on offer last night was said to be similar to the rejected package but with slightly better redundancy terms.

Since the lock-out began, Timex has been busing in the replacement workers amid increasingly angry scenes. Last month 38 pickets were arrested and several policemen were injured after 3,000 demonstrators gathered at the gates.

Yesterday Timex did nothing to ease the closure fears by saying Mr Hall's resignation from the pounds 72,000-a-year job did not alter its negotiating position.

Mr Hall handed in his resignation to John Dryfe, the American chairman of Timex, who arrived on Sunday and will run the plant until a replacement is found. Further negotiations are being handled by Muhomed Saleh, a US vice-president.

Referring to Mr Hall's departure, the district secretary of the malgamated Engineering and Electrical Union, Gordon Samson, said: 'During all our earlier negotiations, when we believed we were making progress with him, the next day it was all turned upside down.

'He had become the focal point of the issue. His departure does remove an obstacle.'

The initial relief among sacked workers that Mr Hall had resigned was replaced by unease as the day wore on. John Kydd, who was sacked as convenor at the plant, said: 'We have to be cautious about this news . . . it could mean closure.'