The French business weekly magazine Challenges reports that the future of ST’s digital division is now in the hands of President Francois Hollande.
The French Economics Minister and the Defence Minister have reviewed the possible divestment or closure of Crolles, the finance Ministry has had it say, the CFE-CGC union has been to see Hollande’s advisers and now the decision on what to do rests with the President.
ST CEO Carlo Bozotti is accused of sabotaging the digital division by publicly referring to its “unacceptable losses” – remarks which are alleged to have caused customers to freeze contracts, so further weakening the division and adding to the justification for closing it.
At stake are 2,500 jobs at Crolles and the last vestige of European-controlled access to advanced semiconductor production..
There are various proposed scenarios – sale or closure of the entire site involving 2,500 jobs, a reduction in jobs by between 1,000 and 1,200 people, or a reduction to a rump of only 300.
However there are warnings that a big hit at Crolles could affect another 20,000 jobs in the Grenoble region.
ST management is criticised for “supporting the share price at the expense of investment planning for the future.” ST is said to have spent $2.6 billion on dividends between 2005 and 2014 while the company has made losses of $3.6 billion. Last year it paid out $354 million to shareholders while losing $465 million.
Arguments for keeping Crolles going are the importance of the military not having to rely on American components and the opportunity presented by FD-SOI for providing leadership in IoT and connected cars.
France and Italy have 27.5% stakes in ST but waived their dividends to provide resources for investment. Italian government sources are staying schtum on the issue of the digital division.
from News http://ift.tt/1PNgqnC
via Yuichun
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