Government offers investment aid to ST

The government has formally offered investment aid to ST Microelectronics, Finance, Economy and Investment Minister Tonio Fenech said.

Speaking to The Times yesterday, Mr Fenech said the aid is for the company to continue investing in Malta, including in new product lines that are not being produced in its Asian plants.

He said the aid offered was "substantial" but would not give further details because talks with the company are still in progress.

Mr Fenech described the situation at ST as worrying for the government, adding that talks had kicked off after the company informed the authorities about the prevailing circumstances.

ST, which employs about 2,000 people and is responsible for around half of Malta's exports, is thought to be planning to reduce its workforce after being put under pressure because of a downturn in the world electronics market and the plunging dollar.

Problems started brewing with the General Workers' Union last week when the company failed to pay its employees the promised bonuses and wage increases as per the collective agreement.

However, the GWU, which represents the majority of workers, said yesterday the company had agreed to pay the due increases with next week's salary.

When contacted, the secretary of the GWU's technology, electronics and communications section, Andrew Mizzi, said the employees were due to get a €232.94 (Lm100) one-time bonus and a €2.91 (Lm1.25) weekly increase with the salary paid on April 18. But this increase was not included in their pay cheque.

Mr Mizzi said that when the union contacted the company, it was told that there had been no instructions from the mother company abroad to include the increase, which had been stipulated in the collective agreement covering the years 2006 to 2010.

During talks, ST said it would only give the promised increase under a number of conditions: that no further increases or bonuses are given for an indefinite period of time, the collective agreement is renegotiated, a new one is negotiated for new employees and the number of workers is reduced drastically, Mr Mizzi said.

He said that although the company wanted to cut its workforce, it had employed about 100 new workers over the past three months, 10 of whom only last Monday.

The GWU said it was waiting to start talks about the company's situation.