Thursday, August 27, 2009

Vale Inco Attempting to Break Union

I have been following the progress of the strike by the USWA – Local 6500 in Sudbury with a good deal of dismay. This workers at this local have been forced into an untenable situation first, by the sale of the Company to CVRD from Brazil, and secondly, by the collapse of the world nickel market in late 2008. It is unfortunate that their collective agreement expired when it did. The prices on the nickel and copper markets at a levels lower than they have been for some years and the Vale Inco was planning an extended maintenance shutdown over the course of the summer.

It is generally conceded by anyone who has experience in organized labour that in times of economic recession, employers will plead poverty and economic hardship in order to extract concessions from labour. The massive profits leading up to the economic downturn are conveniently forgotten, The following information was found on the Union's Strike Site, (http://www.fairdealnow.ca/):

Vale has $22 Billion US (cash assets as of 31 March 2009).
Vale had $13.2 Billion US PROFIT last year (2008 after-tax profit).
Vale has made twice as much profit in 2 years, as Inco made in past 10 years.
Vale Inco collected $4.1 Billion US profit from Ontario two years (2006-2008).
Inco collected $2.2 Billion US in Ontario profits in 10 years (1996-2006).

Vale has collected big profits every year, even during economic recessions.


In the Sudbury Star, the Company has recently announced their intention of resuming production at some of their mines using company staff, unionized office, clerical and technical employees and contractors. This is the first time in the history of the Sudbury Operations that this has been attempted. It was the modus operandi of the management of Falconbridge during the Mine Mill- CAW strike in 2000-01. That brutal affair dragged on for nearly seven months. Production was maintained at Craig Mine, then the company's flagship operation. This mine was chosen because it was a blasthole, or bulk mining operation that required a smaller workforce to produce the tonnage the company wanted. After the strike was over it was apparent that the tonnage produced was such that the effective reserves, of the mine, had been significantly depleted, and the mine life greatly shortened. This effectively knocked the economic structure of the company out of balance. The greater portion of the company's fixed cost structure fell on the lower grade, higher cost operations relying on cut and fill mining methods, such as Strathcona, Fraser, and Thayer Lindsay. When the nickel and copper prices collapsed on the world markets, as a result of the economic downturn late last year, the end result was that the entire economic structure of the Xstrata Sudbury Operations, (formerly Falconbridge), collapsed. They were all closed down in February 2009, with the exception of one new operation, Nickel Rim South, which is currently being rushed into full production.

It is interesting to note that many members of the management team in the years leading up to the collapse of Falconbridge in the Sudbury Basin are now on the management team at Vale Inco. It seems that this group is determined to use the same tactics against Local 6500, that were used against Mine Mill, even if it results in the destruction of the company.

It is clear that this will be a prolonged strike and that labour must act to support the struggle for a fair contract of their Brothers and Sisters at Vale Inco.

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