MANHASSET, N.Y. Semiconductor maker Infineon Technologies AG said it has agreed with a labor union to close an outdated memory chip plant in southern Germany in 2007, according to an Associated Press report.
The report was quoted as saying Infineon struck the deal with the IG Metall union on the fate of its Perlach plant near Munich during overnight talks. Most of the plant's 800 workers are expected to be laid off.
The company reportedly said it had increased its compensation package for affected staff after IG Metall, which organized a series of wildcat strikes last week, stopped asking for the closure to be delayed and reduced demands for retraining.
It didn't give details of the agreement, which still needs approval in a workers' vote, the report said.
The company has said it plans to close the 20-year-old plant in early 2007 and shift production to other factories in Germany and Austria to cut costs and because its equipment cannot produce new-generation chips, the report noted.