End in sight for Vale strike

It looks like the bitter and dogged strike in Sudbury and Port Colborne, Ont., that has stretched on for almost a year might soon be over now that Brazilian mining giant Vale (VALE-N) and the United Steelworkers Locals 6500 and 6200 have reached a tentative collective agreement.

More than 3,000 union members will vote on July 7-8 on the latest offer which will include the terms for heading back to work and likely settle a $1-million lawsuit filed by Vale against the union over violence on the picket line. The union also says that an agreement has been made on a bad faith bargaining complaint against Vale that will be heard by the Ontario Labour Relations Board.

“It’s been a long struggle and when you are out for a year there are no winners, everybody’s a loser,” says Wayne Fraser, a director for the United Steelworkers.

Fraser couldn’t give any details of the agreement that’s being voted on because union members need to be informed first, officially.

“Our members will decide by secret ballot votes whether it meets their needs or whether they want the strike to continue and we’ll support whatever decision they make,” Fraser says.

Two of the key points of contention have been a bonus tied to the price of nickel (in mid-2007 that meant an additional $20 an hour on top of miners’ regular wages) and changing the pension plan from a defined benefit to a defined contribution plan.

It was the longest strike in Sudbury’s history, says the city’s mayor, John Rodriguez. The earlier record was eight months, set by Inco, in 1978-79 (Vale bought out Canadian miner Inco in 2006, creating a new nickel unit, for $19.4 billion in a contested takeover battle).

“For months and months there was no effort and it seemed whatever efforts there were behind the scenes weren’t working to get them back to the table,” Rodriguez says.

The economic impact amounted to nearly $20 million a month in lost wages and caused about 1,000 layoffs in other small-and medium-sized businesses that support Vale.

Rodriguez, who says there should be a law in Ontario banning replacement workers, says the strike caused divisions in the community as strikers watched their non-union neighbours cross the picket line.

“The contractors are loath to say ‘no’ to the company, because if they did they are afraid the company would have a long memory,” Rodriguez explains. “It’s not healthy for the community, it frays tempers.”

In fact, Vale sued the Steelworkers for $1 million, accusing masked picketers of criminal conduct including assault and vandalism. People who crossed the picket line were labeled as “SCABS” on the union’s website.

“There’s been a lot of bad blood as a result of the strike between the union and the company leadership locally,” Rodriguez says. “It will take time and patience and there will be a lot of frustrations to overcome but I’m confident that both parties will get through it because they want to make it work. You have to get on with life you can’t keep reliving the dispute.”

The strike has also stirred up criticism surrounding the perils of foreign ownership in Canada. When Vale bought Inco four years ago, nickel was at an all-time high of more than US$20 per lb. Nickel is currently around US$8.50 per lb. Vale promised Inco employees their jobs would be safe for three years by way of a confidential agreement with the federal government. Come contract time last year, nickel prices had crashed below US$5 per lb. due to the world recession, allowing Vale to justify its cuts and making union members critical of Vale’s loyalty to workers and defensive over the benefits they had negotiated in the past.

“This isn’t a strike the Steelworkers wanted, it was a strike that was forced on us by (Vale),” Fraser says. “And they’ve held our communities and our members hostage for a year now.”

Although Rodriguez is sympathetic to the union’s cause, he doesn’t see a problem with Vale in comparison to Inco.

He says the only difference is that Vale, being one of the world’s largest mining companies, has deeper pockets and isn’t dependent on nickel to survive.

“The bottom line is always how do you maximize your profits so you can pay returns to your shareholders,” Rodriguez says. “They are no different than the company they bought. That strike of ’78-’79 with Inco was tough, it was never a cake walk.”

About 1,200 non-striking workers have been operating some of the Sudbury operations below capacity including the mill, smelter and portions of the Coleman, Garson and Creighton mines.

When the strike began there were 3,075 union members in Sudbury out of a total 4,392 and 116 at the cobalt refinery in Port Colborne, Ont., out of 168. Vale estimates that about 500 workers have opted to retire over the last year.

Vale has yet to reach an agreement with 200 striking workers at its Voisey’s Bay nickel operation in Labrador where workers have been picketing since last August over similar concerns.