LG Philips Displays announced Jan. 27 that it was no longer going to finance its 4-year-old, 5.7 billion Kč ($242 million) plant in Hranice na Moravě, a move meant to counter lagging sales of traditional televisions industrywide as more consumers turn to products like plasma televisions.

The trend has spelled trouble for its parent company, Dutch-based LG Philips Displays Holding, which filed for bankrupcy protection on the same day, citing serious financial shortfalls. Philips suspended all manufactoring at the Hranice na Moravě plant, and is now considering closing the facility down and pulling out of the Czech Republic altogether.

"We've been cut off from all sources," plant spokeswoman Zuzana Fojtíková said.

There are 1,300 jobs at stake. Philips is one of the largest investors here. The government rushed in Jan. 31 with a loan to help Philips restart production. Officials are spurred on by reports that the plant's closing would send unemployment rates in south Moravia, already at 11.6 percent, up another 2 percent.

"Talks with several important investors are already under way," said Industry and Trade Minister Milan Urban.

Urban said Japanese television maker Hitachi was a potential investor for Hranice na Moravě, after the company recently announced that it was considering launching a new plant in Eastern Europe.

Jana Víšková, of CzechInvest, the government's foreign investment agency, said there were foreign and Czech electronics manufacturers interested in taking over the Philips plant.

When it arrived in Hranice na Moravě in 2000, Philips drew 1.36 billion Kč in investment subsidies from the government in return for its obligation to invest 200 million euro (5.7 billion Kč/$246 million) in Hranice na Moravě and to employ 3,250 people by the end of 2007.