ST Microelectronics workers to vote on new austerity package

ST Microelectronics workers will this weekend vote in a second secret postal ballot on a revised package of austerity measures in a bid to keep the country's largest employer in Malta.

The management and General Workers' Union representatives held 15 meetings, in groups of 100, with all the company's 1,500-strong workforce, over the past days to explain the situation and renegotiate a different package to the one they shot down a fortnight ago.

Of the company's workforce, only 542 cast their vote and, of these, only 29 voted in favour.

Sources said the new package cut the total value of the austerity measures by 25 per cent. Whereas before, the effect on the take-home pay was going to be in the region of €355, the new package will see workers' salaries drop by €268.

The latest talks between the management and the union, undertaken following the vote, focused on a revision of the allowance packages, which would soften the blow of the austerity measures.

The previous package rejected by workers was geared to save the company €600,000, which had already been watered down from the original estimated savings of €3 million in the short term. The proposed wage freeze for two years and new employees starting on minimum wage remain.

The sources said that during the meetings the workers were told this was a do-or-die situation and they seemed to understand this.

The sources added there were mixed feelings among workers. While some obviously reacted negatively to being out of pocket by so much, others said it was better to lose €268 than be without a job.

The measures will also affect management, who will not be receiving any bonuses and other perks, including a five per cent increase a year.

The workers were given the "full picture" about the situation at the plant and how it developed over the past two years, when the company's future in Malta started being called into question.

The workers' approval this weekend will seal a deal that comes after years of negotiations with the government.

These intensified following the 2008 global financial crisis which hit hard the microchip giant.

The company had been asking for financial aid and looking at downsizing the workforce at the Maltese plant by as much as 60 per cent for some years.

It took the plunge after the crisis, cutting 1,000 jobs over the past two years. Early in 2009, prospects were not looking good after the government turned down a request for an aid package that ran into tens of millions of dollars.

But since then, conditions on the international markets improved and the prospect of rising labour costs in Asia made European plants more attractive to the management at the company's headquarters in Geneva.