Troubled Freescale Semiconductor could find itself on the wrong end of a lawsuit from 750 of its workers at East Kilbride, after allegedly trying to cut redundancy payments by 30% a few months before it announced plans to close the fab, according to the Glasgow Herald.
Freescale has been struggling under a mountain of debt since being bought by a consortium led by Wall Street private equity firm Blackstone in 2006. Blackstone and its consortium partners then off-loaded most of Freescale to financiers who put up $9.5bn of debt secured on Freescale’s assets.
Since then, the semiconductor market has turned down, Freescale’s best customer, former parent Motorola, has significantly cut back on its orders to Freescale, and the company has been struggling to pay back the instalments on this debt mountain.
Freescale has the disadvantage of struggling to compete with rivals which are free of debt, as is the normal practice in the semiconductor industry.
Freescale seems to have adopted a tough approach to its workers at East Kilbride where it has run a fab for 25 years. Andy Kerr, the local member of parliament, has told The Herald that he has been "made aware of claims" that workers have been threatened with even smaller redundancy packages if they pursue a claim against Freescale to have their original redundancy terms re-instated.
Freescale confirmed to The Herald that some of its employees have already sought legal advice, but it refuted claims that it had ever attempted to block such moves. Freescale PR representatives say that the workers are free to seek legal advice without any penalty.