Editorial | Wednesday, 28 January 2009

Bad news turning worse

Even if there had to be an election tomorrow, wishing to be in Gonzi’s shoes right now would be a masochistic thought even for the Leader of the Opposition. As we focus on the devastating effects the possible closure of Kirkop’s STMicroelectronics plant may have on the local economy, in this week’s special edition, we explain the reason why the Prime Minister may be facing one of his toughest challenges ever.
Sister paper MaltaToday last Sunday featured a front page story on talks being held between the Prime Minister and ST bosses, as the firm seems to be considering the drastic move of shutting down the Malta assembly plant due to the way it has been affected by the global technology downturn. If not to that extreme, there could be a massive cut in human resources. Either way, the consequences would be dire.
Ironically, SGS-ATES, as ST was formerly known, had invested in Malta at a time when the European economy was passing through a very tough patch. At first, Malta was not particularly overjoyed at its establishment here.
When Mintoff was Prime Minister, the strategy adopted to attract investment seemed to centre more on bringing smaller companies in larger numbers rather than attempting to attract large projects employing thousands. Clearly, Mintoff did not want to be held at ransom by multinational conglomerates threatening to lay off employees if he refused to give them what they wanted.
But times were tough, and at a point, companies interested in investing in Malta were very few and far between. Accepting SGS’s offer to come to Malta may have been linked to the island’s need to get some more foreign currency our way while the European economy was far from promising. It may have not been an act of desperation, but perhaps a half-hearted deal at a time when the Malta Development Corporation was losing clout as less foreign investors seemed interested in discussing with it.
Fascinatingly, the day SGS was inaugurated, l-Orizzont ran its front page story on former Minister’s Lorry Sant’s visit to Libya, and left the SGS coverage for the inside pages.
Mintoff did not give the inauguration much importance either. The plaque unveiled on the day says it was Dom Mintoff who inaugurated the plant, but it was in fact the freshly appointed Industry Minister Joe Grima, who had found the SGS deal ready from day one of his taking office.
In his address, Grima did not dwell on how beneficial a giant like SGS would be to the local economy, but rather on how this plant would rebalance our trade with Italy, as though Italians were being accused of not reciprocating enough for our investments.
By 1987, SGS was doing wonderfully, and while the world could see the electronics industry remerge, Malta could feel proud of hosting a company as reputed as ST.
ST nowadays accounts for half of Malta’s exports, and apart from being Malta’s largest employer, it has also offered its staff attractive salary packages – allowing 2,200 families to have more disposable income – very often passed on to our banks, the property industry, our national airline, telecommunications and retail among others. Being an ST employee was synonymous to security and that made its staff feel proud. Unfortunately, even as we stand nowadays, this sense of security is swiftly fading. Asking your bank manager for a loan as an ST employee may have scored extra points until recent, but things have suddenly taken a nasty turn.
The Prime Minister is not expected to influence the global technology industry in any way. At this point, he is there to limit the damage we are facing from the effect of the industry’s downturn – and this may be done by keeping ST happy until the global economy survives the storm. Easier said than done, but perhaps he could do with some help by consulting the parties that are likely to be affected by the issue, in this case the entire nation.
Seeing that not even the union representing ST’s workforce has been consulted, the situation may prove to be bad news turning worse.



Other News

ST cuts production line shifts

No time to take a break

ST through the years

Economists react to possibility of ST shut-down

Tourism in sharp decline over Q4

China’s semiconductor market to plummet

Texas Instruments cuts 3400 jobs

The Year of the Ox

A flat picture at the local market



28 January 2009

Collaborating partners:

Malta Today



Copyright © MediaToday Co. Ltd, Vjal ir-Rihan, San Gwann SGN 07, Malta, Europe Tel. ++356 21382741, Fax: ++356 21385075
Managing Editor: Saviour Balzan