Sudbury on Edge After Vale Job Cuts – by Bill Bradley

Northern Life, Greater Sudbury’s community newspaper, gave Republic of permission to post Bill Bradley’s article.

Mining giant slashes 900 jobs globally, 261 locally

Greater Sudbury is having to face the realities of the global economic maelstrom full force, say Vale Inco officials, unionists, city councillors and members of the community.

First it was Xstrata laying off 682 employees. This week Vale Inco announced 261 non-production job cuts. The Vale Inco workforce reductions are mostly focused on corporate, management and business support operations, according to a Vale Inco press release. The company employs 14,000 people worldwide.

“We are cutting jobs across the board, but none in our production operations in Greater Sudbury,” said Cory McPhee, manager of corporate communications for Vale Inco.

Sixty-five members of Steelworkers 2020 office and technical workers are affected by the cuts, said McPhee. Local 6500 members are not impacted by the announcement, he said.

Dan Serre, Steelworkers 2020 unit chair, said who is being laid off is still being discussed with the company. “It may take another week. The company is not interested in any more early retirement packages so we will lose 65 of our 383 Vale Inco membership,” he said. The cuts in his union are being organized more by job classification than by seniority, he added.

McPhee said the layoffs did not violate the terms of the takeover of Inco because Vale had added many more jobs afterwards than were cut today. The company has increased its Canadian workforce substantially, up 16 per cent, or 1,057 people, from October 2006. Tuesday in the House of Commons, Nickel Belt MP Claude Gravelle raised the issue of the takeovers of both Inco and Falconbridge by foreign companies.

“Vale Inco said no layoffs until October 2009. While I appreciate they hired a lot more people than they laid off, that is not the point. They were not to lay off for a full three years,” said Gravelle.

He said Industry minister Tony Clement promised to review the Vale Inco layoffs.

“Whether he (Clement) does anything is another matter, but we will raise it in the NDP caucus.” Affected employees are in the process of being notified, with 25 per cent being pension eligible.

“They could leave today and go on pension tomorrow,” said McPhee. Severance packages are being prepared for those laid off based on years of service. “We will treat our employees properly.”

C o u n . F r a n c e s Caldarelli sympathized with those affected by the mining cutbacks. She said now the city has to tighten its belt.

“I am against layoffs at the city. That would compound the problem. But I do say there should be an immediate hiring freeze enacted,” she said.

Coun. Joe Cimino said these layoffs will cool off the formerly hot housing market in Sudbury. “I think homes being sold at the higher price range are dropping significantly in value. But, those homes priced in the $160,000 to $200,000 range I think are holding their own in this situation,” said Cimino.

“Unfortunately the tough decisions announced today are necessary in these exceptional times,” said Tito Martins, Vale Inco CEO and president, in a release. Nickel prices are at a low ebb, dropping to $4.25 a pound Tuesday.

But the real problem continues to be high inventories of nickel, said McPhee. “The market is depressed. In late December we announced production cuts, but the market conditions we are seeing are unprecedented.”

Serre said company officials told him no further cuts were being contemplated in his unit. “The company continues to tell us though that everything depends on market conditions.”

Gravelle said his office staff in Chelmsford are standing by to help any laid off workers with their needs. He said the city needs infrastructure money now more than ever, after being notified of the layoffs.

“The mining sector needs help just like forestry. Getting this stimulus funding to cities like Greater Sudbury will help stimulate demand for nickel. Nickel is used in sinks, fridges, bridges and buildings. The more infrastructure funding there is the sooner nickel prices will pick up and inventories will drop to more reasonable levels,” he said.

The economic slump is hitting all mining companies hard. FNX terminated its operations at McCreedy West and Levack, laying off 670 workers, 44 per cent of its workforce in December. Now the company says it has had to cancel a $100 million loan from a bank consortium because the terms “became too steep to bear,” stated an article in the March 3 issue of the Financial Post.