Xstrata Layoffs in Sudbury - Half of Workforce

I learned today that my former employer has announced a major cutback in production at their Sudbury mining operations. Xstrata Nickel, (formerly Falconbridge Ltd.) has decided to close all but one of their mining operations and reduce shifts in the Strathcona Mill. All of this will mean the loss of 686 permanent, full time jobs. It amounts to appoximately half of the Mine Mill – CAW, Local 598 Bargaining Unit. If anyone doubts the severity of the current economic downturn, this is yet another wake-up call. For a city the size of Sudbury, this is clearly a devastating blow, particularly in light of the fact that each one of these jobs has allowed the creation of at least four spin-off jobs in the region.

During my career, my family and I managed to survive through a number of layoffs, and temporary production shut-downs. The difference was that these downturns always had a temporary feel about them, this one feels like a more permanent scenario.

During my dealings with the company over the years, the company always took great pains to indicate that Falconbridge was essentially an economic house of cards, (regardless of who the owners were at the time). The company carried a debt load, that they apportioned to the various producing mines, (distributable costs), and took pains to insure that it was understood that if any unit fell off the table, so to speak, and had to be closed, the remaining mines would have to make up the slack. It appears as though Xstrata has decided that the older operations are not going to viable in light of the current nickel prices and is going to put all of their eggs in one basket, Nickel Rim South. This property is close to becoming a producing mine, and once in production will without doubt be a high volume, low cost producer. The ore zone has relatively high grades and lends itself to bulk mining methods. This will mean a small workforce going forward, especially as the development phase nears completion.

The announcement by Tony Clement in todays National Post that the company has agreed to invest several hundred million in development of Sudbury Operations, in lieu of living up to no layoff clause in the purchase agreement they made when Xstrata took over Falconbridge looks to me to be little more than smoke and mirrors. This is money they likely planned to spend to rush the one remaining mine into full production. They still have the debt load that they had when they took over Falconbridge as well as the debt they incurred for the takeover from Noranda. They will need to generate cash-flow quickly and Nickel Rim South is now the only game left in town. In my opinion, they have not committed any money that they didn't plan to invest with, or without allowing Tony Clement to make an announcement.

In the future, it is possible that the company will expand again once the price of nickel rebounds and the current recession begins to turn around. There will likely be new mines opening at Fraser-Morgan and Onaping Depth, but these are likely to be quite some time in the future.

In the short term, those people affected by these cutbacks need help. The EI system must be made more user friendly, wait times need to be eliminated, and the time frame for eligibility needs to be extended to at least 52 weeks. Further, Xstrata needs to open up its books and indicate to the Union what its future plans are in the Sudbury District. Over the course of my career with Falconbridge, they showed a disturbing tendency to pull a new discovery and mine out of the hat when times seemed darkest. After the layoffs in 1978, Fraser Mine appeared. When #5 Shaft went down, Craig Mine was announced. After the tough market conditions of the late 1980's, Bill James announced Thayer Lyndsley. Is Xstrata going to follow in the footsteps of previous Falconbridge management and pull another rabbit out of the hat, or is the cupboard in the Sudbury Basin finally bare?

No Consensus in CUPE over Gaza.

Since posting my opinion piece a few days ago, it has become clear that there is no consensus within CUPE over the position taken by some members of the Ontario wing of the Union. I have included a couple of links from CUPE that provide differing opinions regarding the position of Syd Ryan regarding the crisis in Gaza:

http://cupe.ca/npo/CUPE-National-oppose

http://cupe.on.ca/doc.php?document_id=677&lang=en

http://www.inews880.com/Channels/Reg/LocalNews/story.aspx?ID=1053124

Click here for more links from LabourStart regarding CUPE.

CUPE's Position on the Gaza Crisis

I noted with dismay that CUPE will propose, “a ban on Israeli academics doing speaking, teaching or research work at Ontario universities, if they do not explicitly condemn Israeli action in Gaza.” at a conference to be held next month. I personally deplore the violence that is currently consuming the Gaza Strip. I cannot condone the actions of the Israeli government, any more than I can agree with the actions of Hamas that some claim, have precipitated this crisis. Both sides need to sit down and negotiate their way out of this morass. The sooner this is done the better. In the final analysis, negotiation will be the only way out. War, short of the complete annihilation of all of the stakeholders can never result in a final solution to a situation. That being said, I as a trade unionist, am very concerned that CUPE, an organization that owes its very existence to the freedoms of speech, association, and choice, provided by our constitution is apparently willing to deny these same freedoms to others, on the basis of citizenship, and/or religious affiliation. The actions of CUPE in this matter can only damage the trade union movement. Although I can understand their leadership may have come to the conclusion that the position of one side of this conflict is without merit. That is their prerogative, and the labour movement has a long history of political action. In this instance however, CUPE is overstepping the bounds by setting themselves up as the arbiters of what is acceptable opinion and seeking to limit the freedoms they demand for themselves.

Labour Under Attack, Again...

Now that George Bush has decided to step forward and include a bailout package for the North American Auto Makers from the TARP funds approved by Congress, the package agreed to by Queen's Park and Ottawa will kick in. I am concerned, (and I am putting it as diplomatically as possible), that although this is designed to provide a rescue package to prevent the failure of one of the cornerstones of our economy, auto manufacturing, the required concessions by the workers are also a thinly veiled attack on organized labour. It is generally conceded that the workers at the big three assembly plants are probably the most efficient to be found anywhere in the industry. It is also undeniable, that the labour costs comprise approximately seven per cent of the price of a new D3 vehicle That is less than the profit margin of the retail dealers. It is also less than the aggregate delivery costs associated with that vehicle.Labour costs are not a large part of the problems plaguing the auto makers. What the governments in both Canada and the U.S. have done is to use the world wide economic crisis in a blatant attack on the workers. Unfortunately, a good many unorganized workers, have foolishly sided with the government and corporations and have become quite vocal in labelling the auto workers as lazy, greedy, fat cats needing to be put in their place. During my career in union leadership, I encountered this sort of mindset quite often in the past. Human nature being what it is, envy leads some people to believe that if some one has a better wage and benefits package, they should have that package reduced rather than working to raise their own level of remuneration. This is a slippery slope. Reducing the organized worker's wages and benefits will not stop there. Once the battle against stronger, organized group of workers has been waged successfully, the unorganized workers will be next on the agenda.

It is often forgotten or overlooked by many that Unions have always worked to raise the wages, and conditions of all workers. Unorganized workers will be defenceless in the face of an economic crisis and government policy that have made high unemployment and low wages the norm. It is also worth remembering, that former economist for the CAW, Sam Gindin, often commented, “The only thing that concessions lead to, is more concessions.”

This is just the latest attack in a long term plan on the part of the right wing. In the 90's the Harris government in Ontario struck down the provisions in Provincial legislation that prevented the use of replacement workers during a legal strike. Not long after, in 2000, Mine Mill / CAW - Local 598 struck Falconbridge in Sudbury. The company brought in replacement workers and the strike continued for seven months and was one of the most brutal and damaging labour actions in memory. The fallout from this is still evident in that community today. I believe that the auto makers needed a rescue package and such a package is vital for the economic well being of Canada and its citizens. However, the workers cannot be held responsible for the bad decisions that threaten to bring down the corporations. By the same token, anyone who works for wages in this country, must see the actions of Harper and Bush for what they are, a blatant attack on workers. If they are allowed to succeed, all will be threatened. Pensions, benefits, and a living wage should not be sacrificed to disguise the failed right wing policies of deregulation, tax cuts and globalization.

Why Blame Unions?

A person would have to be isolated indeed, to have missed the media frenzy surrounding the proposed government loans to rescue the Big Three North American auto makers. In a previous article, I have outlined some of the reasons I believe it is necessary to protect manufacturing jobs, especially in the auto sector, in Ontario. Some people have expressed in the newspapers and other media, reservations and sometimes open hostility as to why unionized workers feel should earn higher wages and better benefits than other workers. Others have expressed the opinion that unionized workers should be required to take a pay cut if tax dollars are going to be used to support the auto makers. Basically, these views hinge on the, “ union workers are lazy and greedy while I work just as hard for less”, arguments favoured by those on the political right, and the corporate elite.

Unions do not have a policy of “getting more” than anyone else. As a rule, Unions hope to raise the living standards for all workers. Most, including the CAW, have programs in place to lobby the Provincial Government for increases in the minimum wage even though most of their membership tend to earn higher wages. All have programs designed to promote issues such as health and safety in the workplace, human rights, and equality issues etc. All workers benefit, in the workplace, from the impact of advances made in these areas.

In Canada 53% of the wealth is held by 10% of the households, or the top 20% control 75% of the wealth. On the other end of the scale, those households in the bottom 10% of the economic spectrum control none of the country's wealth, and in fact have a negative net worth. In point of fact, most of those who complain about unions fall into the group of 80% of the households who are in control of the remining 25% of the wealth. It is true that Labour Unions are in the business of gaining a bigger share of the wealth controlled by the corporations. They are not attempting to gain a larger share of the wealth controlled by the bottom 90% of the population. That would make no sense. They are attempting to gain a larger, more equitable share of the wealth controlled by employers. What does make sense is that when one group of workers improves their lot, all have a better chance of making the same sort of improvement. Unions are not responsible for the current economic mess in the world economic system. There are a good many structural issues that brought these conditions about; we hear about them every day on the news. Working people have not had a significant impact on the creation of the conditions that brought about this collapse. Instead of complaining that their unionized neighbours are greedy, (the envy argument), it would make much more sense for non-unionized groups to organize, and get into the business of redistributing some of the wealth that is controlled by their employers, and seeking to improve their working conditions as needed. In uncertain economic times union membership is an advantage, not a liability. Group action is always more effective than a single worker attempting to protect his or her rights.

Corporations are the benefactors when workers argue among themselves about the efficacy and validity of unions. Unionized workers aren't the enemy; they don't control corporations, or the distribution of the country's wealth. There is an injustice built into our economic system, and the sooner people see where the source of the real problem is, the sooner a remedy can be constructed. In the twenty-first century workers need to have a voice in their workplaces more than ever.