EDITORIAL PAGE (March 16, 1992)

The remarkable turnaround at the Dome gold mine is directly linked to management’s ability to gain control over staffing. As a result, a mine on the verge of closing two years ago is now planning for operations more than a decade in the future.

Placer Dome prevailed in a bitter 6-month strike at the Dome mine in 1990 and brought back some semblance of reality to a workplace that had almost put itself out of business. Management was able to get the message across that maintaining the status quo was not an option. If the union did not reform its control over staffing, the mine would close.

Now the question is, if unions’ control over staff could have had such a negative impact on the Dome mine, what effect is it having on other Canadian mining operations? And how many will not be as fortunate as the Dome? How many will simply close down, victims of shortsighted labor policies? Unions can no longer leave the job of being profitable to management. Unions have to contribute and must adopt a realistic approach to staffing. Because management has gained control at the Dome mine, operating costs have fallen to US$228 per oz. gold produced from US$378 and are now 40% lower than they were before the strike. If that improvement had not been realized, the Dome mine would have been closed today. It simply couldn’t have survived 1991 when the average price of gold over the year was US$362.18.

Production is up, too, setting new records on a regular basis despite a smaller workforce, indicating that cost reductions are not simply a result of layoffs and a smaller payroll. The reduced workforce is actually breaking more rock and milling more ore than the pre-strike workforce. For too long, the role of the unions has been to protect inefficient workers through seniority. Productive employees who wanted to learn new skills and take on new tasks were thwarted by the very union that purports to be helping them. Management should be able to reward those workers who do their jobs well and dismiss those who are living off others’ efforts.

It’s the nature of the mining business that most operations are in fairly remote locations. Employees can easily become insulated from the world in which mining companies do business — the international trading market where currency fluctuations are more than just an item in the business section of the newspaper. The relative value of the Canadian dollar can mean the difference between staying in business or shutting down.

In well established mines, those that have prospered over the years, the problem becomes more acute. Workers often fail to place a company’s fortunes in a global context. That’s why they can justify pay raises coupled with productivity declines with no regard for metal prices, currency exchange rates or taxation policy.

Workers do deserve good pay for the job they do, and protection from ruthless managers. But employees will only prosper if the company prospers. Unrealistic staffing levels, inflexibility on the part of workers and unjustifiably high wages will all eventually lead to a company’s demise. That, in turn, threatens everyone’s job.