Government steps in to save jobs at Trelleborg

The loss of 150 jobs was averted at Trelleborg Sealing Solutions after the government stepped in with an undisclosed financial package to enable the company to increase its production lines.

The agreement between government and the Hal Far-based company was announced yesterday by Finance Minister Tonio Fenech and Trelleborg managing director Martin Hignett.

Citing confidentiality, Mr Fenech did not want to quantify the cost of the financial package on public finances. However, he did confirm that the money was above the government's expenditure forecasts in the budget.

The company, which employs 450 people, manufactures almost one billion 'O' rings a year for the car industry. But orders have nosedived as car sales around the world crashed with the onset of the global recession.

Employees had been working a four-day week since October. In January the company reverted to a normal working week but announced plans to shed 102 jobs.

Under the agreement, the company will invest €2 million in new product lines - intended to create parts for new generation gearboxes - that will be brought over from competing markets. This means that Trelleborg will take on a further 85 employees by the end of 2010.

For the next 17 weeks, the period required for the transfer of the new lines, all employees will work a five-day week - with the fifth day reserved for training. The government, through the Employment and Training Corporation, will support the company's training requirements throughout the 17-week period.

In view of the company's commitment to provide new investment, Mr Fenech said the government would also be offering tax credits.

"We are focused on retaining jobs. It is critical for us to secure jobs in those industries that will definitely bounce back once the global economy starts to pick up again. The government is prepared to increase the deficit if it means retaining jobs," Mr Fenech said.

The government's support was described as "critical" and "exceptional" by Mr Hignett.

"We appreciate the flexibility and speed shown by the government in offering assistance, which will enable us to maintain our operations in Malta. Trelleborg was one of the first foreign companies to invest in the island in 1961 and our commitment is to remain here," he said.

A similar agreement was reached with Methode Electronics two weeks ago with the company agreeing to invest €6.5 million in its Malta operation. The agreement also stipulated government aid in the training of employees and acquisition of new factory space.

Mr Fenech yesterday confirmed that the government task force set up to negotiate support schemes with companies facing difficulties was also in talks with Stainless Steel Products Ltd, which earlier this year reduced its working week to four days.

"Rather than adopting blanket macro-economic policies that will not serve to safeguard jobs, the government is adopting a micro approach by talking with the individual companies, identifying their particular requirements and offering the support that suits them," Mr Fenech said.

However, he admitted that the government did not necessarily have solutions for all the companies affected by the international recession.

ksansone@timesofmalta.com