TORONTO - Company and union officials are remaining tight-lipped on the details, but it's likely Vale workers will be asked to approve some concessions when they begin voting on a tentative labour agreement Wednesday.
During the strike which began almost a year ago at Vale's operations in Sudbury, Ont., and Port Colborne, Ont., the mining company said repeatedly that an agreement wouldn't be reached until its workers recognized the need to reduce costs at the former Inco Ltd. operations.
Vale, which bought Inco for $19 billion in 2006, said keeping up with stringent environmental regulations and maintaining aging infrastructure at the century-old Sudbury operations is becoming increasingly costly.
"We have to generate that money here. Vale is not going to bail us out. That's got to come out of the ground, and if we don't increase our profit margins and get more efficient in order to generate that money, it's not coming from anywhere else," Vale's Sudbury-based spokesman, Steve Ball, said in February.
A month earlier, company spokesman Cory McPhee said the company needed concessions from workers in order to "(put) in place a long-term business platform that allows us to be competitive in all price cycles."
The United Steelworkers countered this by pointing out that Vale's Brazil-based parent company earned US$5.3 billion in 2009 -- a profit the union said couldn't justify worker concessions.
One of the most controversial proposals by Vale was a plan to put new employees on a defined-contribution pension plan, as opposed to the existing defined-benefit plan. Defined-contribution plans are dependent on market returns and don't guarantee a steady income the way defined-benefit plans do.
Another contentious issue was a proposal to lower a bonus tied to the price of nickel and raise its so-called "trigger price." Currently, employees begin to earn the bonus when nickel is above US$2.25 per pound. Vale wanted to change that to $5 a pound. Currently, nickel is selling for around $8.50 per pound, but the price dropped below $5 during the recent global recession.
The company also asked for a longer probationary period for new employees, among other concessions.
The United Steelworkers will hold membership votes in Sudbury on Wednesday and Thursday. Workers in Port Colborne will vote on the agreement Thursday.
Striking employees in Voisey's Bay, N.L., have not yet reached an agreement.
