March 19, 2020 / 1:12 PM / 2 months ago

UPDATE 1-STMicro agrees to temporary production cut of up to 50% at French plants

* Accord runs until April 2

* Addresses workers’ concerns over coronavirus

* All French manufacturing sites concerned (Adds details, background)

By Mathieu Rosemain

PARIS, March 19 (Reuters) - Franco-Italian chipmaker STMicroelectronics agreed to temporarily cut by up to 50% production in France as the company addresses workers’ concerns over the coronavirus outbreak.

The accord, signed late on Wednesday night with two of its three main unions which represent more than half of STMicro’s workforce in France, will run until April 2, a spokesman for the company said by email.

“The goal is to reduce activity in order to reduce the number of people on production sites as much as possible,” said Jean-Pierre Kiledjian, the leader of CFE CGC union at STMicro. All production sites will be affected by the measures, the company confirmed.

STMicro, a supplier to iPhone maker Apple and electric carmaker Tesla, produces a wide range of sensors and chips inserted in everything from cellular phones to planes, machine tools and washing machines.

The Geneva-based company’s French plants were up to now working full steam to meet increased orders for chips dedicated to the next generation of smartphones and low-emission cars.

Kiledjian said production had already started to drop because of the absence of some workers following government recommendations to stay at home and keep a safe distance from other people to stem the spread of the coronavirus.

The head of the CFDT union at STMicro, Eric Potard, said workers on production chains will be able to stay at home on a rotating basis and will keep 100% of their salary, whether they work at the plant or not. The agreement also includes the reimbursement of travel costs by car from home to the site and systematic temperature checks.

The hardline CGT union rejected the agreement and urged the company to close all sites instead.

“Management’s argument is that customer demand will be maintained and that China’s recovery is on track,” the union said in a written statement online. (Reporting by Mathieu Rosemain, Editing by Dominique Vidalon and Elaine Hardcastle)

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