Editorial The pressure of prosperity

Labor negotiations at Inco’s Sudbury operations will be closely watched this year. Quid pro quo may well be the union’s rallying cry. The workers helped out the company when times were tough, they might argue, now it’s the company’s turn.

The Inco story in the 1980s is truly a remarkable one. In the early 1980s, by quickly moving to drastically improve productivity, the company managed to claw its way back into the black in the last quarter of 1984 after 14 consecutive quarters of losses — a total loss of $985 million from mid-1981 to the end of 1984. In 1985 the company turned a profit, slipped back into the red again in 1986, then posted one of its best quarters ever in the last three months of 1987 to make last year a good one.

The Inco story in the 1980s is remarkable. But sometimes forgotten is the role played by labor in achieving those productivity gains in order to maintain Inco’s pre-eminence among the world’s nickel miners. The Inco story is one of cooperation between management and labor and could well serve as a model for labor relations elsewhere.

Inco’s gains in productivity, after all, could only be attained with the cooperation of union labor, particularly the cooperation of members of the United Steelworkers of America. The union’s cooperation is evident by the contracts it accepted in the lean times. There hasn’t been a major strike at Sudbury, for example, since 1978, a good reflection on the union and the company.

What’s more, the union’s cooperation came at a time when its membership was dwindling. The dramatic drop in membership experienced by the steelworkers — from 190,000 in the early 1980s to 125,000 before coming back up to the current 160,000 — would normally have been enough to bring out the militant faction in any organization.

To the union’s credit, it stayed the course with the company.

To the company’s credit, through all of those tough times, there were no layoffs. Early retirements and attrition enabled the younger workers to stay on the job — layoffs would have meant the younger workers with the lea st seniority would go first. There hasn’t been a layoff at Inco’s Sudbury operations since 1976.

In fact, in Sudbury, where the Steelworkers’ membership has dropped from 20,000 in 1972 to 6,500 today, there are more union retirees receiving pensions than union members receiving wages.

Those tough times were weathered by labor and management together. That teamwork enabled the company to survive even with nickel prices at $1.60(US) and copper at 60 cents a pound and to be profitable with nickel at $2.20 and copper at 70 cents . Now, with Inco firmly in the black, nickel prices are at all-time highs on the London Metal Exchange — an admittedly poor indicator of the real value of nickel today but a generally accurate barometer of trends — and copper is over $1.

As a result, with the company looking ahead to a banner year, the union may feel it has some catching up to do. For example, it may seek to improve retirees’ pensions. Many of those retired employees helped out in the early 1980s by giving up their jobs so younger employees could stay on.

The Sudbury experience, as one union official refers to the unique solidarity of the northern Ontario community, is indeed one that others might take note of. Now, as others watch, it would be ironic and a terrible pity if the pressure of prosperity disrupted the spirit of cooperation that developed during the ordeal of tough times.