Updated: Minister, GWU to discuss ST
The Minister of Finance is to meet a GWU delegation on Friday to discuss the situation at ST Microelectronics.
The meeting was announced by the GWU after the government earlier said Mr Fenech had invited the GWU for talks. The government also denied the impression which it said might have been given in a GWU statement that it had turned down a call by the GWU for such talks.
The GWU said it did not intend to give that impression.
ST, by far Malta’s biggest private sector employer and exporter, has asked the government for a financial support package running into tens of millions of dollars.
The minister, Tonio Fenech, told The Sunday Times last Sunday that while the government had been very generous in terms of investment, it could not be expected simply to subsidise a wage differential which equalled practically the full wages being paid to the employees.
"We are very concerned and keen to ensure the company has a future in Malta. (But) since on an economic level there are job growth prospects, we believe ST's employees can be redeployed in other industries over a short but phased number of years, though, of course, there is the personal and human aspect of potential job losses and movement," he said.
Mr Fenech explained that the government would like ST to further invest in Malta on lines where Asia today cannot compete. Support which the government is offering is linked to a comprehensive restructuring plan to make ST operations in Malta viable in the longer term.
According to observers, the Kirkop plant is facing losses that could reach €58 million (Lm24.9m) a year.
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laurence schembri
May 14th 2008, 08:23
Albert Fenech, is probably right in his assumptions. If ST, just for saying sake made sales of $100 million in a year production it can double or even triple this in Asia. Unfortunately this is the way that the world`s economy is being measured today.
Examples are plentiful, recently I had to phone a government office in Newcastle and my call was answered by a lady with an indian accent, not from Newcastle, but India. Letters received from the same office are stamped by Swiss mail, this is the way economies are run today. Marked `Made in the UK`, but today the UK does not produce one washing machine, and it goes on and on. The worker today became just an object, it is a matter of hire and fire.
The wheel will eventually turn. Siemens for example are contemplating to bring its production back to Germany from Spain, for labour cost in Spain is getting higher and higher, I suppose this is the same as what is happening over here. Big Corporations do not measure human factors, just profits. The four a half million on the dole in Germany is not an economical accident, it is man-made, that is the way we live today I`m afraid.
ALBERT FENECH
May 14th 2008, 04:55
Mr. Xuereb's position is fully understood. Unfortunately, there is so much mis-information, wrong information and political bias that one cannot fault the public for getting the wrong impression. The bottom line is that all interested parties (including the Government and the GWU) have to get together with the Management of ST Malta to find ways and means of cutting down drastically on labour costs. The choice is clear. Either slash labour costs, or lose ST Malta. There are NO other options.
André Xuereb
May 13th 2008, 21:26
Mr Fenech, I did not mean any disrespect to anyone. I acknowledge that employees will definitely find relocation difficult. As I said in my previous post, I find it important that relocated employees keep, at the very least, the same wages. As to whether or not ST is/will be making losses, I am an outside observer and am taking my cue from the last line of this article: "According to observers, the Kirkop plant is facing losses that could reach €58 million (Lm24.9m) a year. " I cannot vouch for the truthfulness, or otherwise, of this statement.
I hope I have made myself more clear.
laurence schembri
May 13th 2008, 19:45
One factor that companies are feeling the pinch is simply the US Dollar, that is at its lowest ebb, but the American economy will pick up eventually, once Bush is out of the way. The other main factor is much near home, I still maintain that the exchange of the Lira against the €uro was far to high comparing to what the rest of European countries had to settle for. Take Germany as an example DM1.95 for 1 €uro, no one is going to convince me that the Maltese economy is anywhere as strong as the German economy. OK, so imports become cheaper, but, and there is always a but, to keep afloat and to sustain jobs we have to export and that is when the crunch is felt. There is very little we can do about it now. We made our bed and we have to lie in it. Why the Maltese Lira was not floated on the money markets say six months prior to the adoption of the €uro I will never know. If the American economy will not pick-up within the next three to six months, there will be many companies that will feel the pinch like ST and this will not augur well to a small economy like Malta.
ALBERT FENECH
May 13th 2008, 19:21
As an ST Malta employee of 18 years' standing I would respectfully inform Mr Andre' Xuereb that he does not have the slightest clue of what he is writing about. The Company is NOT losing money. However, the shareholders of ST Corporate assess that if the same production is carried out elsewhere where labour costs are much, much cheaper (i.e. China, The Philippines), their Corporate Company would be making much, much more profit, possibly to the tune of an additional $US58 million annually. Can anybody see shareholders anywhere turning down such an opportunity, merely to keep the Malta Plant going? If Mr. Xuereb was a substantial shareholder, would he agree to keep production in Malta and make less money in dividends on his shareholding? In addition, where does Mr. Xuereb propose to deploy the 2,200 people working there? Their employment affects thousands of families; these families have property mortgages, bank loans, hire purchase payments on cars, furniture. These families inject millions of euros annually into Malta's internal economy. The Company's export brings in millions of dollars annually in foreign exchange. ST Malta has hundreds of local suppliers and many sub-contractors employing many other persons. What will their position be if the company closes down? Mr. Xuereb seems to have the concept that ST Malta is a big loss leader as have been Malta's ship repair yards for decades. He is far off the mark. In 27 years of operation, ST Malta has brought untold wealth to the Maltese economy and has employed thousands of people. The current situation is by no means a joke. It is a tragedy for Malta and the Maltese economy.
Max Fattuhi
May 13th 2008, 18:55
Whenever we discuss such issues, there is one thing we must ALWAYS keep in mind. Basically it's that any subsidies given by the government to such companies are paid from our taxes. Now is that fair?
The free-market economy ensures that resources move from less-efficient (or less profitable) activities towards others that are at the end of the day more efficient (or more profitable) activities. That tax-payers foot the bill is, at the end of the day, unacceptable.
Joe Martinelli
May 13th 2008, 18:44
The government should do its utmost short of directly subsidizing a company which happens to be on rocky grounds. As someone else suggested elsewhere, when the company was profitable it did not share the spoils with the government save for paying legitimate taxes.
Whether anyone knew or not before the election is totally immaterial. What would either party have suggested? Let it close down? Subsidize as we have been doing the shipyards for thirty-some years?
The government has a tough job but with the goodwill of the company and the GWU and the employees themselves a compromise may be reached for the benefit of all.
André Xuereb
May 13th 2008, 17:57
Am I the only one who sees nothing wrong in closing down enterprises that are losing money and are being subsidised (i.e., the taxpayer is paying to keep these companies going), assuming that the workers are all given alternative employment with the same wage?
James Vella
May 13th 2008, 17:14
Just a question:-
Where we aware of the situation in ST before the election (just 2 months ago). And if yes, (whihc since talks seem to have been going on for quite a while - it seems that we were aware), did the electorate not had the right to know before the election?
It seems to me, that information if manipulated and hidden, and there is no respect towards democracy, dignity and the peoples' right to make an informed decision.