Labor relations key to staying competitive

Management and labor have to abandon their traditional adversarial relationship if Canadian mining companies are to survive, says the president of Brunswick Mining and Smelting (TSE), citing his own company’s experience as a prime example.

Brunswick will either “innovate or die” and must “eliminate the basis of confrontation” to improve labor relations, John Carrington told delegates to the recent annual meeting of the Mines Accident Prevention Association of Ontario (MAPAO) in Toronto.

The company has been hard hit by low prices of zinc, its main product. It also suffered a crippling 10-month strike which ended in early May, 1991. Since the end of the strike, productivity has increased from nine tonnes milled per man shift to 14 tonnes. Overtime has dropped from 14% in January, 1990, to 2% today. There has been a saving of $1.6 million per year in supplies purchased. The net result is a drop to $37 in costs per tonne milled in March, 1992, from $50 in 1990.

The mine has more than 20 years of reserves but it is also 27 years old with correspondingly high costs. The question at Brunswick is, can costs be brought down far enough for its 20-year potential to be realized? “The urgency is total quality management and continual improvement,” said Carrington, who was president of MAPAO until early 1991 when he was appointed president and chief operating officer of Brunswick.

The incentive for continued improvement, he says, is that despite a 26% drop in costs, Brunswick’s expenses relative to other zinc producers have barely changed because other international producers have initiated similar reductions over the last two years.

“Lower costs cannot remain a plateau,” Carrington said. “They must be attacked continuously to remain competitive.”

While the technical side of cost-cutting needs a scalpel, the human side needs a different approach.

“Unions refuse to accept the low-wage solution; that is, the 5% wage cut will lead to another and then another,” he said. “In time, their members will be substantially worse off than now. What the unions are seeking is maintenance of high wages and development of the highly skilled worker.” The United Steelworkers of America represents Brunswick employees. The union’s research describes many innovative ideas and Carrington says the union’s studies are mandatory reading for the company’s staff. “The Steelworkers have acknowledged the changing times,” said Carrington. “They understand better than most how and why much of the change has occurred. They are determined to survive and they know that they only have a role as long as an employer has employees.”

MAPAO President Graham Ross spelled out the buffeting the mining industry received in 1991 from low metal prices, poor market conditions, workforce reductions and mine closures. Total employment in the Ontario mining industry declined by more than 20% during the year, he said.

The 1991 MAPAO board of directors represented organized labor for the first time as a result of Ontario’s Bill 208, the intention of which is to eradicate the adversarial relationship that exists between labor and management. A co-operative, unified front is mandated in all matters involving health and safety. Labor and management representatives share the MAPAO board equally.