Inco, Steelworkers settle at Thompson

The lockout at the Manitoba division of Inco (N-T), which produces 5% of the world’s nickel, could end as early as this week if a tentative settlement is reached in contract talks with the United Steelworkers.

Members of USW Local 6166 were scheduled to vote on the new contract at presstime. The contract includes a 6% increase in wages over three years, plus a 13% increase in pension benefits. The aggregate increase in wages and benefits works out to 10% over the life of the contract.

Union negotiators had recommended that the membership accept the new offers, which would maintain operations at Thompson, Man., up to September 2002.

Resuming production at Thompson would take about two weeks once the contract is approved.

Inco was obliged to declare force majeure on several sales contracts that depended on production from the Manitoba division.

Inco shut down operations at its mines, mills and smelters in Thompson in mid-September, after the union rejected a rollback of wages and benefits. In a second series of talks in November, Inco proposed a zero-increase contract with a $3,000 signing bonus and a further bonus based on future moves in the nickel price, but the workforce also rejected that, in a vote on Nov. 18.

The new contract incorporates the nickel-price bonus Inco had proposed in November and adds a “success sharing plan” tied to cost reductions. These bonuses would kick in once the operation starts making a 17% return on investment; if all the cost-reduction goals are reached, the bonus could be as high as $9,000 per employee.

Inco, in a bid to bring its production costs down, has taken an aggressive stand with the Thompson workforce. Segmented figures are not public, but Inco’s company-wide production costs were US$2,825 per tonne (US$1.28 per lb.) in the third quarter of 1999. The company’s principal underground operations have traditionally been low-cost, but Thompson has generally lagged behind the Sudbury-based Ontario division.

Contracts at Inco’s Sudbury operations come up in June 2000, and those at the neighbouring mines and smelter owned by Falconbridge (FL-T) are due to be renegotiated next August. Thompson workers had been seeking pension benefits on a par with those at the Ontario division.

No further word has come from Inco on a possible settlement of its dispute with the government of Newfoundland over development of the Voisey’s Bay nickel project in Labrador. Government officials, including Premier Brian Tobin, were in Toronto to discuss new development proposals this week, but no resolution to the conflict has emerged.