Six months after Vale's Canadian workers began strike, little progress has been made

Six months after most of the Canadian employees of Brazilian miner Vale voted to go on strike, the two sides in the drawn-out labour dispute appear able to agree on only one thing: virtually no progress has been made.

On July 11, the more than 3,000 employees at Vale's mill, smelter, refinery and six nickel mines in the Sudbury area of northern Ontario voted to go on strike along with their counterparts at Vale's Port Colborne, Ont., refinery and its nickel-cobalt-copper mine in Voisey's Bay, N.L.

Half a year later, the bargaining table sits gathering dust and both sides are staunchly refusing to resume talks until their opponent shows some willingness to bend. Not surprisingly, the company blames the United Steelworkers for the lack of headway, and the union blames the company.

"Vale's position says, 'We're always ready to go back provided the union accepts all our conditions and concessions,' and that's just not collective bargaining. That's holding a gun to someone's head," said Ken Neumann, the Steelworkers' national director for Canada.

The Steelworkers have long held the position that they're willing to resume negotiations if the company will come back to the table with no preconditions. As far as Vale is concerned, however, asking for no preconditions is a condition in and of itself.

"From our perspective we haven't seen any serious indications from the Steelworkers that they're prepared to negotiate," said Vale spokesman Cory McPhee.

"... They're saying, 'Well, we'll go back with no conditions, but we have to have no concessions,' so you follow up a statement that says you have to have no conditions by setting a condition."

The increasingly bitter dispute centres on two main issues: Vale's proposal to reduce a bonus tied to the price of nickel, as well as a plan by the company to exempt new employees from its defined-benefit pension plan, moving them instead to a defined-contribution plan.

The union says Vale is a profitable multinational corporation that's trying to bring its Canadian workers down to the "lowest common denominator" of its global operations by slashing benefits.

"In the third quarter of this year alone they've got profits of US$1.7 billion, so we're not talking about someone that's coming with their hand out and saying, 'We're in deep trouble.' That's the furthest thing from the truth," Neumann said.

But Vale chief executive Roger Agnelli warned before the strike began that Sudbury is the company's highest-cost operation and wasn't sustainable at current price levels. Additionally, although the price of nickel has nearly doubled from its low of around US$4 a pound a year ago, it's still a long way from the $15 level it reached before the recession set in.

"It's really about putting in place a long-term business platform that allows us to be competitive in all price cycles," McPhee said.

"The inventories on the London Metal Exchange for nickel are approaching record highs, and there are still producers who idled capacity during the economic downturn that could potentially bring that capacity back online. The nickel market is a very competitive market and we want to be the leader in the market, so we have to position ourselves to do so," he added.

This is the first strike at the former Inco's Sudbury operations since Vale bought the company for $19 billion in 2006. Earlier work stoppages at Inco have been lengthy, including a nine-month strike in 1978 and a three-month strike in 2003.

The difficulty with such lengthy strikes is that they only tend to get resolved if one side gives in, and this fact can push both sides to dig in their heels for as long as they can, said Alan Hall, director of labour studies at the University of Windsor.

"When it gets this long, it's really a question of who's going to give up first and give up in a major way," Hall said.

The Steelworkers have plenty of experience surviving long, painful strikes, and it helps that workers have "a fairly large, fairly strong international union behind them," Hall said.

The union has been ramping up its pressure tactics both locally and internationally in the past few months, and Neumann has even flown to Brazil to meet with politicians there in the hopes they'll put pressure on the company to end the strike.

From Vale's perspective, global demand for the nickel mined and processed at its Canadian operations is still relatively weak due to the recession, so there's not much incentive from a profit perspective to resolve the strike, Hall said.

The longer the strike lasts, the more damage will be done to labour relations, particularly if one side feels like it lost the battle.

"If one side really does feel like it's being humiliated, it certainly does make for a difficult return to normal relations," Hall said.

John Fera, president of Steelworkers Local 6500 representing striking workers in Sudbury, said Inco workers never forgot the prolonged strike of 1978 and the outcome of this dispute could be similar.

"I think the relationship going forward between Vale Inco and its workers is going to be pretty strained, and it's going to take a lot of hard work and a lot of understanding and co-operation to one day get the company and (its employees) to work well together," Fera said. "I think it's going to be an uphill battle."

In the meantime, there's no doubt that workers and the communities in which they live are suffering from the work stoppage. Donn-Marr Welding Supplies in Sudbury was forced to close its doors after 31 years due to the strike, and several other suppliers and transportation companies that depend on Vale are struggling with a dramatic reduction in their business.

"We're really entrenched in the community here because it's where we live, work and play. The bonuses and all those sorts of things get spent in the businesses here," said Alex Patterson, a mill operator at Vale's Sudbury operations.

Meanwhile, the union says its resolve isn't flagging.

"Our people are very, very strong in their resolve," Fera said. "We're not giving back stuff that we fought for for so many years, but we are willing to negotiate to see what kind of discussion that brings."

"One day longer and one day stronger - that's our motto."