Metals Report: Labor relations seen improving

Labor relations in the mining industry are changing dramatically in the 1980s, largely a result of the changing economics of the industry.

The 3-month old strike at Noranda’s Canadian Electrolytic Zinc refinery at Valleyfield, Que., is a good example of how direct is the effect of labor relations on commodity markets.

That labor dispute and the resulting drop in zinc production is considered to be the major reason for improved zinc prices during the summer.

While unfortunate situations such as the one at CEZ will probably never be completely avoided, in general things appear to be changing for the better. As in many sectors of the economy, Canadians can often look south to see what the trends in labor relations will be developing here. Many Canadian companies have American connections — unions certainly do — and the trends established in the U.S. tend to carry over into this country.

John Corbett, speaking at the American Mining Congress’s International Mining Show in Las Vegas in October, outlined his view on the direction of labor relations over the next 5-8 years.

“I suggest we are in an era of far better relations with our unions,” says Mr Corbett as reported in the AMC’s bulletin, Washington Concentrates. “The routine strikes and militancy we suffered in the past will all but disappear. We will enjoy far more cooperation and understanding conerning management’s needs to operate not only efficiently, but also cost competitively.”

Mr Corbett, vice-president for industrial relations at Asarco, points to some recent settlements as evidence of the willingness on both sides of the bargaining table to accommodate one another. Concessionary settlements by Amax at molybdenum mines in Colorado and the 1986 copper industry concessionary settlment were two examples he gave.

“I would suggest, however, that it would be a mistake for the mining industry to attempt to reduce or hold our total labor costs to a minimum wage. To attract the calibre of employee we need, our compensation package must be realistic.

“Further, management is being viewed by employees in a far more favorable light. We will see a chipping away of organized operations and a continuation of non-union operations.

“Finally, this sea change (in labor relations) will give mine managements the opportunity to develop a more productive, more efficient work force. The results will be better, more competitive operations.

“The conditions that have produced and will maintain this sea change also are due to management’s recognition and insistence upon fair treatment for its employees. This policy required and resulted in a definite transition to the `open door’ style of management that I believe is prevalent in the minng industry today.

“Pay and compensation packages that are realistic have been adopted with or without the `assistance’ of labor unions and, particularly important, far more realistic and meaningful communications efforts have been established. Employees are being advised fully and openly of the facts of the industry and operations. The response and results have been gratifying and constructive, conditions that will continue to grow.”

But Mr Corbett says there are three factors that could alter the rosy picture he paints.

First, if economic conditions improve dramatically, employees, unions and management could revert to the “good old days” of excessive labor cost increases.

Second, if union leadership changes drastically, it will be for the worse, not better, says Mr Corbett.

Third, management “stupidity” could thwart efforts at improved relations. “If we attempt to enforce minimum wage level compensation packages on our employees, the forecast of reasonableness and responsibility goes out the window..”