Contextual Content

Canadian miners strike global giant

After months of bargaining the strike began on July 13, after Vale Inco refused to alter its original
demands for concessions. Union members in Sudbury and Port Colburne in Ontario and Voise Bay in
Labrador responded by voting 85% in favor of taking strike action. The most contentious concessions
demanded by the company are a drastic change in pension benefits for new hires, changes to seniority
rights and a cap on what’s known as the Nickel Bonus. This bonus was negotiated in earlier years to
allow the company to benefit from relatively lower wages when nickel prices were depressed and
workers to benefit when the price was high.

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Story Transcript

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay, coming to you today from Sudbury, Ontario, Canada. I’m on the picket line of Vale Inco, one of Canada’s largest mining operations and one of the largest nickel mining operations in the world. Vale Inco was a company that was Canadian up until April 2006, bought by the Brazilian company Vale that also has a lot of New York/Wall Street money in it. It’s a classic fight between a mining town, a community that depends on these incomes. The workers here at Vale Inco are the lifeblood of Sudbury. If they’re on strike, the whole of Sudbury and the whole community feels it. The company says they want this company to be sustainable. When you ask them what does sustainable mean, it means to them it needs to be profitable in all business cycles. So it means at a time of the low end of a business cycle, workers should be taking concessions. And that’s what they’re asking for now. At the high end of a business cycle, they’re saying the workers shouldn’t have the same benefit from it they have in the past. These workers had something called a "nickel bonus" that would allow them to share when nickel’s at a high price. Company wants to put a cap on that. Ask them why [and it’s] because, they say, that’s the way it works in Brazil and Indonesia and other places the company does business, and they think Canadian workers should come into line with the way miners are paid in other parts of the world word. We’re at a time when nickel prices are low, the world economy is in a slowdown, and big employers like Vale want to take advantage of this moment to build contracts that will be advantageous to them in the years to come. The workers have decided to say no to this, and this struggle could go on for weeks, and perhaps even months. The strike began on July 13, after Vale Inco refused to alter its original demands for concessions. Union members in Sudbury and Port Colborne in Ontario and Voisey’s Bay in Labrador responded by voting 85 percent in favor of taking strike action. The most contentious concessions demanded by the company are a drastic change in pension benefits for new hires, changes to seniority rights, and the a cap on what’s known as the "nickel bonus". This bonus was negotiated in earlier years to allow the company to benefit from relatively lower wages when nickel prices were depressed, and workers to benefit when the prices were high.

PICKETER (UNIDENTIFIED): The company and the union came up with the nickel bonus quite a few years ago to keep wages low. And so in good times everybody shares in it, and in bad times it doesn’t hurt the company.

PICKETER (UNIDENTIFIED): And the nickel bonus, all it is is profit-sharing. Nickel could be at $7, and we make a little bit; Nickel could be a $15, we make a little bit more, and the company’s still making a lot more.

JAY: Steve Ball, Vale’s spokesman and manager of corporate affairs for Vale Inco’s Ontario operations, told The Real News the company was restructuring to achieve sustainability. He defined that as being profitable in all business cycles. The workers don’t buy it.

HOMER SEGUIN, RETIRED UNION LEADER: At Vale Inco, their spokesman says that they’ve got to remain viable in all economic times, and yet you’re on strike here over the nickel price bonus. When the downturn in the economy comes, they don’t pay a cent. How can that be economic times and at all cycles? That issue is not one about the cycles. You’re on strike because of seniority rights that we won back in ’69. Seniority rights, your right to bid on jobs, has nothing to do with economic cycles. So two of the three issues that you’re on strike about, they’re full of hogwash when they say they’re—it’s about economic times.

~~~

PICKETER (UNIDENTIFIED): No one’s paying a nickel bonus right now. There’s no nickel bonus. Why they want to cut the nickel bonus when there’s no nickel bonus is beyond us.

PICKETER (UNIDENTIFIED): Because they know it’s going to go up.

PICKETER (UNIDENTIFIED): Because they know it’s going to go up and they don’t want to share in the profits.

~~~

JAY: The company’s offer would see the pensions for new employees held privately, with the company matching 8 percent of what the employees invest in their personal fund, a system known as an RRSP in Canada, something like a 401(k) in the US. This would replace the guaranteed pension that current workers receive.

PICKETER (UNIDENTIFIED): I know, from what I’m understanding, is the present pension is twice as good as the one they’re offering us. There’s no guarantee in one they’re offering us. You’re your own banker after that. Right now we have some form of guarantee that keeps it safe for us.

LEO GERARD, PRESIDENT, UNITED STEEL WORKERS: And they actually believe that they’re going to come here, after 50 years of us struggling to get a decent pension, and wipe it out so that every kid who comes after will have to depend on the stock market for a living. We risk enough of our life and limbs in those mines and plants that we don’t need to risk our retirements with a failed philosophy.

JAY: Vale’s Steve Ball says restructuring is necessary as the Inco [that] Vale bought in 2006 is no longer sustainable at current nickel prices and compensation rates, even though the workers were willing to re-sign the current contract and were not demanding a raise.

GERARD: We’re a lot smarter than he gives us credit for. To have the audacity and the gall and the arrogance to say publicly that these mines aren’t sustainable at this cost structure, first of all, to think that we’re stupid enough to think that this cost structure will survive—it won’t. It will go up. I don’t know how high up it’ll go, but when the economy turns around—think about this. It’s bottomed out. Is the worst it’s been in 75 years, and the price of nickel is still higher than it was 2 years ago. It’s higher than it was just before Inco sold it. And Inco made money every year for 20 years. Every year. Vale Inco made more money in 2 years—$4.1 billion, twice as much has Inco had made in the previous 10, yet Inco was able to sell itself for $19 billion.

JAY: A former Inco executive, speaking under conditions of anonymity to the Canadian newspaper The Globe and Mail, confirmed that Sudbury’s nickel operation has been profitable for years under lower nickel prices than today’s, adding that the company "… just want(s) to break the union. They want to completely hit the reset button on the entire labor situation and the agreements that have been put in place in the past." When asked why Vale wanted to cap the nickel bonus, Steve Ball told The Real News [that] Vale wants a unified approach to profitability and incentive compensation across all its business units, which includes mines in Mongolia, China, India, Angola, South Africa, Chile, and Peru. Vale is the world’s largest producer of iron ore and the second-largest producer of nickel.

PICKETER (UNIDENTIFIED): From what I hear, we only have a couple of months’ stockpile, and nickel’s going back up. China’s picking up. So I think this is all just a ploy to use the world events right know to knock us down a few pegs. But there’s no reasoning for it here. We’re making them money. We’ve been making lots of profit. So they might have had a slow quarter, but they, you know, made $4 billion in the last few years. They could’ve floated us a little bit.

JAY: Business analysts are suggesting that the strike will have little effect on Vale as world demand for nickel is low and Vale’s other nickel operations are sufficient to meet the market. This has left many wondering why the union chose to fight now.

GERARD: Workers don’t want to do what we’re having to do. Nobody wants to have a interruption in their work, nobody wants to have a interruption in their income stream, but at some point you’ve got to decide how much humiliation will you swallow. And for this company to do what they’re trying to do, there is no good time. But here’s the difference. This is not like wheat in the field or corn in the field—if you don’t harvest it, it will rot. The ore in the ground ain’t going away. Inco still produces 33 percent of the world’s nickel. Of that, the overwhelming amount is from Canada. At some point, that’s going to have to come into the equation. And they’ve offended their workforce. I’m pretty sure if you wander around town, you know they’ve offended the community. And they’re going to have to come to understand that if they want to mine and process this resource, they’re going to have to do it under mutually acceptable terms, not unilaterally imposed terms.

JAY: The union says due to the mine’s importance to the entire community, this is an attack on Sudbury as a whole, not just the workers. Vale’s Steven Bell says mining is a capital-intensive operation, and to attract global capital Canadian workers will have to get more competitive with workers in less developed countries. Some workers have another strategy in mind.

PICKETER (UNIDENTIFIED): Go away. We’ll just take over the company, we’ll make it a crown corporatization, and we’ll get our roads all paved from all the profits out. If we make $4 billion in four years, we’ll get all the roads done. Kick ’em out. Who cares?

JAY: It’s not such a far-fetched proposition, when one considers that Vale itself used to be owned by the Brazilian government until it was privatized in 1997. Both the company and the union see this strike as a critical test of will that will shape Vale Inco for years to come. Many workers told The Real News that this was fundamentally about whether Canada will gradually become like countries that only have the rich and the working poor. So far, the workers seemed determined this won’t happen to them.

PICKETER (UNIDENTIFIED): I’m third-generation. My dad’s—in ’82 was off for ten months on strike, and he told me he survived and I’ll be able to survive too. So I’m not scared to stick here for as long as I can to make it count.

PICKETER (UNIDENTIFIED): I sat in this very same spot for three and half months in 2000 during a strike, like, pretty much here with my brothers and sisters every day. So, yes, I’m prepared. Mind-wise and whatever it takes, I’m ready, man. I’m in for the fight.

DISCLAIMER:

Please note that TRNN transcripts are typed from a recording of the program; The Real News Network cannot guarantee their complete accuracy.