Union and management in talks
on ST future
By Kurt Sansone
Union officials and managers at Maltas largest manufacturing plant
were yesterday locked in negotiations over the future of the ST plant
in Kirkop after last weeks announcement that the company was transferring
some of its lower-end production lines to Morocco next year.
In a letter sent to the General Workers Union and Minister for
Social Policy Lawrence Gonzi, the ST management said that labour costs
have risen dramatically over the last year and some of the production
lines were not competitive. Labour costs for ST in Malta were three
times more than costs incurred in Morocco.
The letter also listed two solutions to help restore competitiveness;
an indefinite wage freeze to curb costs incurred from cost of living
increases and collective agreement increments and a radical overhaul
of the shift system. The collective agreement is due for re-negotiation
in April next year but the move can hardly be described as a pre-emptive
measure to curb the unions negotiating power. General Workers
Union section secretary Andrew Mizzi was quoted in The Sunday Times
as saying that all industries in electronics were facing similar situations.
The Malta Financial and Business Times was told by a company official
that the situation is being treated very seriously because of its sensitivity.
Management is not contemplating lay-offs but the bad news for the Malta
plant comes hot on the heels of the announced closure of the ST plant
in Rennes, France.
On 3 September ST announced major plans to re-organise its manufacturing
infrastructure in France. The process involves the closure of the plant
in Rennes, which employs 428 permanent employees. The ST announcement
said that the company was trying to find alternative work for the Rennes
employees in the other French plants belonging to ST.
Cost competitiveness has become a major issue for ST, the worlds
fourth largest semiconductor maker, as its rivals have been shifting
production to Asia were labour costs are far less than in the western
Meanwhile, yesterday In-Nazzjon quoted unnamed company sources, who
said that the production line that will be transferred to Morocco will
be replaced by another production line brought over from France.
The Kirkop plant employs almost 2,400 people and is by far Maltas
largest manufacturing company. It also accounts for a large portion
of the countrys GDP.