Members of the United Steelworkers’ Locals 7458, 189, and 7689 voted July 21 by over 96 percent in favor of taking strike action against PotashCorp if no progress is made towards a new collective agreement. The union said the vote is a rejection of a company offer that does not address key issues, including control over contracting out, pensions, wages, vacation, and bonuses.
The three locals, representing 500 workers at three mine sites, (Allan, Cory, and Patience Lake), say they are working in coordination to achieve a fair settlement during a period of skyrocketing demand for potash. The union says record potash prices and continuing provincial giveaways allowed PotashCorp to collect huge after-tax profits. The union alleges that PotashCorp is receiving far more profit per worker than most mining companies, while it pays wages lower than many other major Canadian mining operations. It says it has met with PotashCorp about 40 times since April. Workers have been without a contract since the end of April.
“Our goal is to reach a good settlement that recognizes the value of our members’ efforts to make this company such an economic success story,” said USW negotiator Lee Edwards. “We look forward to getting back to the bargaining table to resolve this.”
PotashCorp said it received the strike notice July 23. Workers are allowed to strike 48 hours after the notice is served, which would be Friday, July 25 at 2 p.m. In response to the strike notice, PotashCorp served the union a lockout notice, which enables it to lock these employees out at any time 48 hours after the notice is served.
PotashCorp is hopeful that a resolution will be achieved, but is prepared for any contingency.
PotashCorp President and CEO Bill Doyle told analysts that the union leadership worked for the best possible contract they could get and they got it. He said when presented with the deal, had he had false teeth, they would have dropped out. Doyle said that under the deal the workers will be the highest paid potash workers in the industry.
As for the union’s comments about high company earnings, he said that money is reinvested back into the company for expansion, which creates more jobs in the mine communities. He said PotashCorp is the biggest taxpayer in Saskatchewan and next year will account for about 10 percent of provincial revenue, adding that Saskatchewan has the highest taxed potash anywhere in the world.
Doyle said it cannot allow its cost structure to be destroyed and cited the airline and automobile industries as examples. He said should there be a strike, it will be the workers who suffer as it is impossible to make up for lost wages. He said it was an extraordinary contract offer and that hopefully cooler heads will prevail.
With potash supplies already tight and prices going up, industry observers wondered if a strike would propel prices up even further. The three mines in question produce about 30 percent of PotashCorp’s product.
Another factor is that most of PotashCorp’s mines are in the midst of the annual summer shutdown schedule anyway, including the three that are threatening a strike. Allan is having its outage July 27-Aug. 9; Cory July 13-26; and Patience Lake June 15-Oct. 4. Other outages include Lanigan Aug. 17-Aug. 30, Rocanville Sept. 7-30, and New Brunswick Aug. 10-23.
Agrium Inc. told Green Markets last week that it has already had its summer shutdown and that its mine is back up and running. As for its own labor situation, it said the earliest a strike could be held would be April 2009. The Mosaic Co. had not returned calls at presstime.
Another factor facing the Saskatchewan potash industry is high employment in the province. The government noted the June employment levels were the highest recorded for any month in the province’s history, according to The Star Phoenix newspaper. The paper said a large number of young people continue to leave the province. The unemployment rate in the province was a seasonally adjusted 4 percent, versus 6.2 percent Canada-wide.
In the meantime, Saskatchewan employees of grain handler and input provider Viterra Inc. have been on strike for the past two weeks (GM July 14, p. 13).