Union and management in talks on ST future

By Kurt Sansone
Union officials and managers at Malta’s largest manufacturing plant were yesterday locked in negotiations over the future of the ST plant in Kirkop after last week’s 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 union’s 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 world’s fourth largest semiconductor maker, as its rivals have been shifting production to Asia were labour costs are far less than in the western world.
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 Malta’s largest manufacturing company. It also accounts for a large portion of the country’s GDP.