CANADIAN MINING PERSPECTIVE: Vale, union impasse raises ghosts of strikes past

As the strike by Steelworkers Local 6500 at Vale Inco's Sudbury operations approaches the seven-month mark, I ...

As the strike by Steelworkers Local 6500 at Vale Inco's Sudbury operations approaches the seven-month mark, I am left wondering how labour relations took such a giant step backwards. Not since workers struck against then-owner Inco in September 1978 have the two sides been so far apart.


Thirty years ago when union members took to the picket lines, Inco was sitting on significant stockpiles. Sudbury workers picketed, and the company continued to sell nickel. The view that Inco was an arrogant and dictatorial employer solidified. The company was seen trying to break the union. Workers won better wages and pensions eventually, but at the cost of nine months' pay.


Through the 1980s and '90s the mines, mill and smelter at Sudbury prospered. Inco was able to boost productivity, reduce its workforce and take advantage of improving prices. Inco made a conscious effort to change its corporate attitude toward its front-line workers. Labour relations were demonstrably more cordial. A strike in 2003 was settled after only three months, as nickel prices rode the wave of rising commodity prices during the last decade. Wages went up, and better health care benefits were negotiated.


Then in late 2006 Vale, the Brazilian multi-national, won a bidding war for Inco. In a deal worth US$16.7 billion, Vale edged out Falconbridge, Phelps Dodge and Teck Cominco for the prized nickel producer. Canadians bemoaned the fact that control of such world class assets – in Sudbury, ON, in Thompson, MB, and the new Voisey's Bay mine in Labrador – were in foreign hands, but Vale made promises that it would not lay off any workers for three years, and other reassuring noises.


Vale's reassurances were worthless. In March 2009 the company said it would be laying off 423 workers in Canada, including 261 in Sudbury. The next month Vale announced it would be shutting down its mining and mineral processing operations in Sudbury for eight weeks, beginning June 1. Workers were not feeling very kindly toward Vale when the current strike began on July 13, 2009. On July 28, workers at Voisey's Bay began their own strike as talks with Vale Inco broke down. (In mid-September workers at Vale's Thompson mines and plants ratified a new contract, thus avoiding a work stoppage.)


The two sides fail to see eye to eye on almost everything. At issue is the company's desire to eliminate worker bonuses tied to the nickel price and its desire to close the company's defined benefit pension plan to new workers.


Accusations are flying back and forth. "Bad faith bargaining." "Failure to return to the bargaining table." "Conspiracy." "Union busting." The rhetoric escalated to death threats at one point.


Vale Inco's five-year plan for its Ontario operations were discussed at a workshop on June 15-16, 2009. The 94-page document has been made available by the Sudbury Star at It might be worth CMJ readers' time to go through it and decide for themselves what the future might bring to Sudbury.


Using employees who are not members of Local 6500, Vale Inco is determined to restart production at reduced rates both in Sudbury and Labrador. In fact, smoke has been observed coming from the chimney of the Copper Cliff smelter, although whether a pound of nickel has been produced is not clear.


This raises another issue: Vale's decision to train its employees of another local, Steelworkers Local 2020 which represents its office and technical employees, to take over the strikers' jobs. Arbitration over whether or not Local 2020 workers can safely take over the jobs previously done by Local 6500 members broke down late in January.


In a gesture of solidarity with Local 6500, Voisey's Bay workers have rejected the latest contract offer from Vale Inco.


Meanwhile, representatives of Mine Mill Local 598/CAW and Xstrata Nickel reached a last-minute tentative agreement on Feb. 1, 2010, averting a strike at the neighbouring facilities formerly belonging to Falconbridge. Workers ratified the contract the following day. The deal includes a new nickel bonus formula, pension and benefit improvements, a new performance-based incentive and a $0.20 per hour wage hike.


The deal between Xstrata and the Mine Mill workers "…clearly demonstrates that if both sides sit down and negotiate in good faith, they can resolve difficult issues," said, Local 6500 president John Fera.


In my opinion, Vale Inco has worked itself into a corner. It refuses to soften its position on bonuses and pensions, saying it has to bring its Canadian contracts into line with its "international culture". Therefore, the company has tarred itself with the same brush so feared when it took over Inco – that foreign owners would be no friends of Canadian workers. That sets labour relations back more than 30 years.


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