GWU and ST Microelectronics reach deal on new collective agreement

The General Workers Union and the senior management of ST Microelectronics have reached a deal on a new collective agreement for staff at the electronics manufacturing plant.

The union will hold a meeting with ST employees in the coming days to explain the terms of the new agreement that has been reached after months of negotiations.

During the negotiations, the GWU had insisted that ST – Malta’s leading exporter- drop its austerity measures, including a pay cut to its staff, that it had introduced in 2010 to weather a financial storm. The union had argued that ST had originally agreed to end the austerity measures by 2012 and that it had since tried to avoid a new collective agreement.

ST, a French-Italian multinational company, employs around 1,600 workers at its Malta plant, making it Malta’s largest private sector employer. Its output amounted to 47% of all Malta’s exports in 2014, down from 57% in 2011.

It reported a €23 million loss in 2014, continuing a three year downwards spiral in profits for the company. In 2011, it had reported profits of €127 million, which fell to €113 million in 2012 and €12 million in 2013.

In a recent financial report, ST claimed that “continued pressure on selling prices led to a drop in the profitability of its manufacturing operation” and that its management is taking action to “reduce the cost of production and improve the pricing structure of the product portfolio”.

However, the company’s global operations remain extremely profitable, with its gross earnings reaching €2.8 billion in 2014. The Maltese government has allayed fears that ST could pull out of Malta, insisting that the island-based plant is an important specialized site and highly valued within the ST group.