Only days after the Prime Minister Lawrence Gonzi was highlighting such good news as the increased investment in SmartCity and the overwhelming response to the offer of the Midi bonds, STMicroelectronics has announced it intends laying off a substantial number of workers from the Malta plant as part of a plan to slash 4,500 jobs from its operations worldwide.
This will naturally come as a shock to the workforce, even though reports of downsizing and, even, of a relocation of the plant to another country have been circulating for quite a long time now. The workers have been kept in suspense for far too long and, at least in this matter, the parent company ought to have shown greater sensitivity towards its workforce.
What is particularly strange is that up to last Wednesday, the Finance Minister, Tonio Fenech, was still saying that the government was not aware of any plans for mass redundancies at ST. He was quoted by this newspaper as saying: "From the discussions we have had with ST, it is not the case that the company wants to lay off people. This does not result to us". ST is having to cut jobs as, like so many other companies, it has been hit by a sharp drop in demand. For the full year, the company posted a net loss of $786 million.
The latest news from the company is that it plans to substantially downsize the Malta plant and close down Morocco. ST employs 2,200 workers at its plant in Malta but it is not known yet how many workers are to be laid off.
It is known that the government has been having talks with ST for about two years. There was a time when the company was seeking to negotiate a financial package but very little has been made known about this. The matter has also been tackled at a political level, with the Prime Minister raising the firm's future with the Italian Prime Minister, too.
Besides the large number of workers it employs, ST in Malta accounts for a good proportion of the island's exports. Reduced production from the Malta plant could also affect the job prospects of workers employed by its suppliers, estimated at roughly 5,000.
If ST were to carry out its plan and cut its workforce in Malta, this would represent the biggest blow of the recession to manufacturing industry so far. Vitally important now is to see first if the company could perhaps be persuaded to reverse its plan, even though ST has already worked out the job redundancies from its other operations.
Even at this late stage, it may well be a good idea if a committee were to be set up to investigate the situation and see how the firm could be helped to downsize its workforce gradually, if this is at all possible.
Ideally, the committee should include representatives of the opposition as well as of the General Workers' Union, Malta Employers' Association, the Director of Labour and, naturally, representatives of the parent company. It would be wise, too, to have such a body chaired by an independent person who enjoys everybody's trust and who has the ability to steer the initiative towards a successful outcome. An ideal candidate would be George Abela. He has enough time to do it before taking up the post of President of the Republic.
Maybe, just maybe, a way could be found to soften the blow.