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MERGER NEWS – CAW offers conditional support for Inco-Falconbridge deal

TORONTO - The merger of INCO LTD. and FALCONBRIDGE LTD. will set the stage to increase the economic potential of Ca...


TORONTO – The merger of INCO LTD. and FALCONBRIDGE LTD. will set the stage to increase the economic potential of Canada’s mining areas, specifically the Sudbury Basin. To mitigate any potential downside to workers, suppliers and communities, the CANADIAN AUTOWORKERS, which represents close to 2,000 Falconbridge employees, has listed eight conditions.

►A moratorium on the whole or partial closure of existing mines, mills, or smelters until the approval of the impact studies and merger plan described below.
►The merging companies, prior to their formal combination, will undertake a comprehensive review of the current operations of the two companies and their economic and social impacts, with a focus on how these operations would be affected by a merger. This review will accept input from union officials, local governments, supplier representatives, aboriginal representatives, environmental groups, and other stakeholders.
►Following this review, Inco and Falconbridge will develop a formal merger plan outlining a timetable of actions, including both closures/rationalizations and new investments and capital developments.
►The merger plan must include clear investment targets and timelines for new capital spending in Canadian primary and secondary projects.
►The merger plan will also specify targets for increasing aggregate purchases of Canadian-made mining and smelting equipment, inputs, and services over time.
►No involuntary layoffs should occur as a result of the merger. Where closure or consolidation occurs in order to achieve desired operational savings, associated employment reductions would occur through attrition only, facilitated by voluntary restructuring incentives. Given the demographic profile of the two companies’ existing workforces, this goal is readily attainable.
►The merger plan must be approved by affected unions, local governments, and other stakeholders, as a condition of regulatory approval for the merger to go ahead.
►The merging companies’ existing pension and post-retirement benefit obligations must be fully recognized and funded by the new company.

“The proposed Inco-Falconbridge merger provides a good ‘test case’ of whether we can collectively aim to make the most of our resource wealthor whether we will leave the key decisions entirely up to unfettered private executives. We are not resisting change We see substantial potential benefits arising from the merger of Inco and Falconbridge. In order to maximize the net benefits to all Canadians (not just investors), we need to establish a process through which all stakeholders can play a role in achieving a more prosperous economic future,” said the CAW (www.caw.ca) in its press release.

(CMJ readers may also be aware of rumours concerning another bid for Falconbridge, one by Xstrata. So far, what you hear is only speculation and rumour.)


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