No plans for lay-offs at ST - Fenech

The government is not aware of any plans for mass redundancies at STMicroelectronics, Finance Minister Tonio Fenech has said.

"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," Mr Fenech told The Times yesterday.

The Minister's reaction came on the back of an announcement by the multinational chipmaker that it was shedding 4,500 jobs worldwide in 2009.

That same announcement prompted the General Workers' Union to request a meeting with Lawrence Gonzi about the situation - a request which has been accepted.

The union asked for a meeting with the Prime Minister on Monday after MaltaToday reported on Sunday that the ST management had a number of meetings with the Prime Minister and the Finance Minister to discuss the future of the company in Malta.

The union was unaware of the talks and was not informed by the Kirkop plant's management of the company's situation.

On Monday, The Times reported that top-level management at the mother company of ST is actively considering shutting down the Kirkop plant, prompting the government to go into overdrive in negotiations to convince them to stay.

Industry sources had said the local plant has long been working on a gradual downsizing plan but, recently, the top management at the level of the mother company is said to be actively looking into the option of shipping out the local production.

Discussions intensified in the past weeks, with the last meeting being held last week. When asked about the talks, the Prime Minister had said discussions with ST have been ongoing for the past two years.

In May, talks between the two sides had also fallen into crisis. The Sunday Times had reported that the company had asked the government for a financial support package running into tens of millions of dollars.

The Finance Minister had made a counter offer but the company never responded. Then, in recent weeks, information reached the negotiating team on the Maltese side that the Kirkop plant was again under active review.

Industry sources said that in the circumstances it is not clear whether the company is preparing to move or simply wants more money from the government.

ST is Malta's largest private sector employer, with some 2,200 workers. It is also a leading exporter.

ksansone@timesofmalta.com