NEWS | Wednesday, 23 April 2008

ST hit hard by strong Euro

Management talks of job cuts

Replying to a complaint filed by the General Workers Union, yesterday ST Microelectronics warned that the collective agreement signed between the two parties in 2006 will need re-discussion, in view of the fact since E-day the company has been losing out on the US Dollar at 15 per cent, due to trading in Dollar markets from a Eurozone base.
The letter was sent in reply to a General Workers’ Union complaint filed Friday, when ST employees received their salaries without the due bonuses and pay-rises as per agreed in the 2006 collective agreement.
“Every first of April an automatic pay rise and a bonus is issued at ST,” said GWU official Andrew Mizzi, confirming that bonuses are due regardless of staff performance.
“In its answer to our complaint, the company agreed to issue the agreed pay-rises and bonuses based on four conditions,” he said. “The first condition is that they are allowed to restructure their current labour intensive activities, by means of downsizing. The second would be an immediate freeze on pay-rises. Thirdly, they are asking us to re-discuss the entire collective agreement to reduce the current benefits such as sick leave. Finally, they’re also asking to fix lower conditions of employment for newly hired personnel.”
Currently employing over 2,300 employees, ST’s plant in Malta is the largest employer on the island. The hourly rate for employees in Malta reaches that of $16 per hour on weekdays and $19 per hour in the weekend, while in Asia it tops $2 per hour.
“They’re telling us that due to labour costs, the ST Malta plant is loosing $55 million every year when a comparison to the Asian market is made,” Mizzi added. “As much as we appreciate the fact that Euro changeover has impacted negatively on ST’s operations, when the dollar was fairing well they kept silent didn’t they?
“It is not only the labour force that is impacting negatively. There are other issues such as fuel and transportation costs in Malta that is affecting them,” he added.
The union replied to the company stating that it is ready to discuss the company’s position and work for a compromise, as long as they guarantee the issue of the pay rises and bonuses, regardless of the conditions stated.
“First they issue the pay rise, and then we discuss,” Mizzi said.
Attempts made to contact ST Microelectronics officials for comment proved futile.

[email protected]