ST Microelectronics management is telling workers in face-to-face meetings ahead of a second vote on a package of austerity measures that the situation at the Kirkop plant is "do or die".
The management and General Workers' Union (GWU) representatives are meeting workers in small groups to give a "frank briefing" about the situation at the plant and how it developed in the past two years, when the company's future in Malta started being called into question.
"The management is being very frank and basically telling us it's do or die at this point," said one worker, who preferred to remain anonymous. "For the first time, employees are getting the full picture of the situation and how it developed in these past years."
The meetings started on Friday and are expected to continue throughout the week as ST and the union agree on a final package, after workers recently rejected the company's cost-cutting proposals, throwing into doubt investment which the company had announced. ST is Malta's largest private sector employer. Late last month, Prime Minister Lawrence Gonzi announced the company would be installing a new high-end production line at its Kirkop plant using government aid. No mention of the austerity measures had been made then but when the workers rejected the deal in a secret ballot, it transpired the investment was conditional on the package being approved.
Of the company's 1,500 workers, only 542 cast their vote and of these, just 29 voted in favour.
The measures, intended to save about €600,000 (negotiated down from a package saving €3 million) in the short term, would also have meant a wage freeze for two years and that new employees would start on minimum wage.
Workers are now expected to vote for a second time on a final package, which is being discussed in the aftermath of last week's vote. After the first discussions on Thursday, the GWU said the talks were very positive and appeared hopeful that a compromise would be reached.
Since Thursday, however, the company and the union agreed not to speak to the press.
The latest talks have focused on a revision of the allowance packages which would soften the blow of the austerity measures, estimated to make each employee some €250 to €300 worse off per year.
The size of the investment and the government aid was not disclosed, but industry sources told The Sunday Times it was likely to be somewhere in the region of $20 million over the next two years. ST has invested over $1.1 billion since it set up in Malta in the early 1980s.
The workers' approval would seal a deal that comes after years of negotiations with the government. These were intensified following the 2008 global financial crisis which hit the microchip giant particularly hard.
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, reducing 1,000 jobs in 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.
The deal brokered with the government guarantees the company's presence in Malta for some years with a workforce that is more or less stable at current levels, the sources said.