LONDON Ė STMicroelectronics is planning production stoppages at its wafer fabs in Crolles, France, and Catania, Italy, amid reports that CEO Carlo Bozotti will soon announce a reorganization of the company that may include a change of business model.
The Crolles 200-mm wafer fab is slated to incur 7 days of "partial unemployment" and cease production from Dec. 24, 2012 to Jan. 2, 2013. The Crolles 300-mm wafer fab is set for 10 days of partial unemployment between Sept. 29 and Dec. 21 and will then stop production until Jan. 2, 2013, according to the website of the Union Nationale de Syndicats Autonomes (UNSA).
UNSA quotes Luca Vecchio, deputy secretary of the Italian Unione Generale del Lavoro (UGL), stating that the plan for Catania is for 25 days of closure for the 200-mm wafer fab and 13-days of closure for the 6-inch wafer fab. The LIP research department and the EWS test line will be stopped for 6 or 8 days, depending on accounts.
A spokesperson for ST said that the company has proposed measures at Crolles and Catania to bring manufacturing in line with "realistic market expectations." It is thought that low demand could be, in part, company specific and related to declining orders being placed by mobile phone company Nokia with ST's joint venture subsidiary ST-Ericsson.
The spokesperson confirmed the proposal for Crolles 200-mm but said that with regard to the 300-mm fab ST is still in discussions with employee representatives. In Catania ST is asking for 25 days of CIGO (Cassa Integrazione Guadagni Ordinaria) for workers at its 200-mm line and 15 days at the 6-inch line, the spokesperson said.
On the UGL website the Italian union leader said that 2,200 workers would be affected by temporary lay-offs. In translation he added: "Unfortunately, today's may not be the only measures taken by the company to overcome this quarter because next week the CEO Carlo Bozotti will announce the global reorganization of the company and therefore the current industrial model could be upset."
UNSA contrasted the impact of cost-saving measures on STMicroelectronics workers with the annual salaries of 19 leaders of ST, which it claimed are, in aggregate, more than four times what they were five years ago and total 39 million euro (about $50 million).
The ST spokesperson declined to comment on rumors of a forthcoming company reorganization.
Related links and articles:
ST trims losses, sees soft June, cuts capex
Bozotti has a dream: to turn round ST's digital problem
ST-Ericsson passing processors to ST, cutting staff