Northern Life, Greater Sudbury’s community newspaper, gave Republic of Mining.com permission to post Michael Atkin’s column. www.northernlife.ca
Last month, I wrote about the hollowing out of Northern Ontario and the continuing deterioration of authority, influence and relevance in key sectors.
The topic of the day was the destruction of CBC Radio as a connecting force in the North and the ignorance of the people who made the decision to save such piddling amounts of money in the shadow of such benefit.
This month another storyline.
Vale Inco is restructuring. They are taking people in the finance, human resources and procurement departments and moving the strategic thinking and execution out of Sudbury and down to São Paulo and Toronto. In simple terms, it means that local procurement (say rock bolts) will remain in Sudbury but worldwide purchasing (say tires and information technology) will be done elsewhere. It means that the analysis of the business will move from Sudbury to São Paulo.
It is no secret that important decisions are not made in Sudbury anymore about the international operations of Inco, or for that matter, the local operations of Inco, but when you start moving human resource people you are reducing the Sudbury operation to the level of a dumb terminal. Mark Cutifani, a past president of the Ontario division, notwithstanding his regular commute to Toronto, ran the world from Sudbury. It was an exciting time for Inco Sudbury operations. Those days will never return.
It’s important to understand Vale Inco isn’t doing anything but rationalizing their operations, and cutting costs in a recession. I don’t like it but the current owners are just doing their job.
They are doing what you do when you buy something. You make it fit your business. If Inco had been a buyer instead of a seller, three years ago, we’d be consolidating jobs in Sudbury, not São Paulo. We did this to ourselves.
Look to the failed previous Inco management and the sycophantic federal and provincial governments if you are looking for scapegoats. And forget those silly commitments Tony Clement is talking about. They don’t matter. They are a joke and have nothing to do with creating wealth. I’ve always wondered why they bothered with any of these things anyway? It gives the false impression that selling out isn’t selling out.
Vale Inco is doing nothing different than The Sudbury Star. If you want to talk to a real person in accounting, classifieds or production you need another area code.
So what’s left? Our Mining Supply sector is what is left. It is the only heartbeat in a wasteland of managers with nominal responsibility and no authority. If you want to know what to do for economic development just follow the money. The money is where decisions are made.
How do you get to make decisions? You have to own something. We no longer own much of anything. I won’t depress you with the litany of rationalizations, sell offs, closures and cutbacks.
What matters is to save the local ownership of the mining supply sector at all costs. If we let that go, we will have nothing left. Most of the people that own these businesses are older than 50. They are going to sell. The City of Greater Sudbury needs to fund a massive effort to keep ownership local. That means succession planning to ensure these companies pass from their current founders to their bright young daughters and sons or the enthusiastic managers of these companies or another local owner who has no intention of moving the thinking somewhere else.
This is the most critical cost effective economic development investment that can be made. I’ve tried to sell this idea to the last three mayors of this city, all of whom understand the importance of it, but none of whom did anything about it.
As Vale Inco drifts away, as small retail concerns continue to shrink in the shade of big box stores, as national media companies centralize everything in Toronto, and as governments retrench, there are really only two viable strategies for Sudbury’s sustainability. The supply sector and education. The rest is window dressing.
The time is now. It’s not that complicated. It just takes the guts to make it happen.