The View from Ontario, 137 Days into a Mine Strike

Editor’s note: The strike at Vale Inco’s nickel and copper mines in northern Ontario is closing in on the six-month mark. Members of Steelworkers Local 6500, the strikers are fighting against the profitable company's attempt to use the economic crisis to shift power. Now more than 3,000 miners and mill workers are hunkering down for a winter on the picket lines in Sudbury, Ontario, a city of 150,000 residents about four hours north of Toronto that’s long relied on the minerals its miners have wrenched from the earth.

Emotions are running high throughout the community and people are starting to lose patience, whether they work for Vale or not. Engineers, managers, and non-striking union members in administrative jobs are being forced off desk jobs and into the mines. Contractors are being pressured to cross picket lines by their employers, who in turn are being pressured by Vale to keep crossing the lines or risk losing future contracts with the company. Hundreds of out-of-town scabs have come in, and the union is working with sympathetic politicians to try to reintroduce anti-scab legislation.

The union thinks the company is producing ore in violation of its agreements. The company claims it is their right to produce whether there’s a strike or not. Members have stopped trucks in Sudbury, and the union has taken the campaign global, protesting at ports where hot ore is being unloaded.

But in Sudbury belts are tightening. As they do, other businesses are finding themselves with no other options than to lay off workers. This is causing less money to be spent in the community, $20 million less every month according to a government-backed economic development taskforce.

Local blogs and newspapers predicted before the strike that the contract coming in 2009 would be full of major changes and concessions. The funny thing is these changes were all predicted at a time when the price of nickel was at a never-before-seen record high.

The truth is Vale doesn’t care what the price of nickel is right now. The company’s main objective is to become the largest and most powerful mining company in the world and it will take out anybody to achieve this goal. It won’t matter whether you’re an employee, a contractor, or a supplier. The company has already moved its equipment source from local suppliers to those abroad, ambushed its own staff and forced out former top managers, and cornered Local 6500 into striking.

We’re fighting to stop this “domino effect.”

‘SUSTAINABLE’

All this for what? Because Vale claims that its business is no longer sustainable here in Canada. Vale chief executive Roger Agnelli has told reporters that “Sudbury is the company's highest-cost operation and isn't sustainable at current price levels.”

However, former Inco executives said the company was consistently profitable at similar nickel prices just a few years ago.

Vale had $13.2 billion profit worldwide last year after taxes. Vale Inco collected $4.1 billion profit from Ontario between 2006 and 2008.

Here is what’s really going on, as a former executive told Toronto’s Globe and Mail:

“They just want to break the union. They want to completely hit the reset button on the entire labour situation and the agreements that have been put in place in the past.”

CONTRACT TALK

The contract Vale offered this summer before the strike included more flexibility to hire contractors. Workers applaud the company for realizing we’re shorthanded, but instead of new employees the company would rather hire contractors, who don’t get pensions, benefits, or bonuses.

We can see where this is going. Over time management will push more and more for contractors, while cutting jobs for Vale Inco employees. The company denies this, but they have already done so in Brazil.

The nickel bonus has been the most-talked-about issue (that’s nickel the metal, not 5 cents). Introduced decades ago when the old company was going through a hard time and couldn’t afford to give the employees a raise, the nickel bonus formula promises that when times are better, workers receive a bonus to compensate for the loss of wage increases.

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In good times everyone shares in the wealth, and in bad times nobody does—it was a deal that everyone seemed comfortable with.

In recent, flush years the bonus has paid thousands of dollars. But those years have been rare. All told, the bonus has worked out to about an additional $5 an hour over the last 10 years.

What’s happened to executive wages since Vale took over? Six executive officers were paid a total of $33 million last year, and executive officer pay overall increased 121 percent.

Vale Inco workers make $29 per hour on average—and in this economic climate there is zero nickel bonus. Labor accounts for less than one-tenth of Vale’s costs.

The pension is another big-ticket item. The company wants new employees hired as of January 2010 to get a defined-contribution plan, where workers accrue funds in individual accounts administered by the company.

In the plan we have now, an employee doesn’t contribute. So now employees will have to spend a portion of their own wages to cover their pension—without a doubt, a wage decrease.

The contributions of employees are typically deducted directly from their pay and frequently some portion of these contributions is matched by the employer, like a 401(k).

What’s wrong with that?

We can already see the problems we’ll encounter in future negotiations. New and old workers will be divided between those in defined-benefit and defined-contribution plans. They’ll fight over which plan gets funding, which plan is healthier. Plus, in defined-contribution plans, as a report from a group of central bankers points out, workers “must not only calculate the amount of savings needed to retire but must also make a series of complex investment decisions to achieve their retirement goals” —with a limited choice of investment options and a limited ability to manage financial risk. Something tells me that’s a bad idea.

The company has yet to inform us of any of the fine print of how two pension systems would mesh, or why employees would want to switch given all these problems. Because the company is being vague, it’s conjuring up nothing but distrust.

Meanwhile, older guys are fighting for the new hires because we come from a smaller community where most people know each other. Generations of families have worked for Inco. They’re fighting for their kids and grandkids.

BAD BLOOD

That’s the way it’s been the entire time with this strike: little information, tons of unanswered questions, and a vague contract proposal. This company has something up its sleeve that might be bigger than all of us. They’re making this more difficult than it has to be.

Instead of negotiating, Vale has made a big deal lately about its million-dollar donations for water and grass upgrades in Sudbury and surrounding towns. Sudbury was known as “the moon” because of all the pollution from copper smelting. Now the company is laying down soil and high-powered grass that grows in no time. It's all part of government guidelines that require them to reduce their environmental impacts, and it’s peanuts for a multinational company worth billions, done for tax planning and politics. 

A few million dollars might keep the mayor quiet for a while, but this community stands to lose a lot more in the long run if Vale keeps up its arrogant carelessness. 

Yannick Rivard is a member of USW Local 6500.