Vale Inco’s New Invoicing System Causing Some Layoffs in Sudbury Supply Sector – by Bill Bradley

Northern Life, Greater Sudbury’s community newspaper, gave Republic of permission to post Bill Bradley’s article. (This artilce was originally published on November 12, 2008)

Some Greater Sudbury businesses are having trouble getting paid by Vale Inco.

It is not because Vale Inco is broke, but because of a new invoicing system that is being implemented by the company, said small businesses in Lively and Vale Inco itself.

Harry Sheppard, owner of Home Hardware in Lively, said Tuesday morning that some smaller business customers cannot pay him for what they have purchased because they in turn have not been paid by Vale Inco.

“I do not have much business with Vale Inco myself. However, it is affecting a dozen businesses in the Walden area that deal with my store. They say they will pay me when Vale Inco pays them,” said Sheppard.

“These business customers of mine are good customers so the fault does not lie with them.”

Another Lively business, which did not want to be named, said the problem lies in a new invoicing system that Vale Inco is implementing.

The company is implementing a global invoicing system, said Angie Robson, Vale Inco manager of external relations.

“We recently launched a new system company-wide for managing our accounts payable process. We are experiencing some normal glitches that any significant change of this sort would entail,” said Robson.
“We very much value our relationship with our suppliers. We are dealing with them on a one-on-one basis. People generally understand we have to work out the bugs. But, ultimately the new system will improve our management and performance, because it is designed to be more effective.”

Dick DeStefano, executive director of the Sudbury and Area Mining Supply and Service Association (SAMSSA), said Vale Inco is far from broke.

“It is not that Vale Inco is lacking in cash. They have $11 billion in cash and a credit line of $15 billion,” he said.
However, he said he has been working diligently, asking Vale Inco to get this invoicing issue resolved.

“It has hit a number of companies in the mining service cluster. SAMSSA has complained about this months ago. We are looking at the successful resolution to the problem,” said DeStefano.

So far, temporary layoffs in his membership have climbed to 200, said DeStefano, mostly related to a drop in business from the economic slowdown. But things could be worse.

“Every day, when I look at the news feeds I receive on mining, I see closures of mines all over the world. Four more mines closed today.  If things do not improve, we could see layoffs here, as much as 20 per cent of the permanent workforce at some point.”