A War of Words or a War of Worlds: Brazilian Vale versus North American USWA – by Kim T. Morris (Part 3 of 3)

Kim Morris won third place in the 2011 Arthur W. Page Society and Institute for Public Relations case study competition – business school category.

Her case study entry was on the Vale Sudbury year long strike – A War of Words or a War of Worlds: Brazilian Vale versus North American USWA.  She  is a senior adviser of communications and public affairs at the North East Community Care Access Centre.

Discussion

Reputation

Public perception of Vale has changed dramatically since 2006. There is mistrust and suspicion surrounding the company’s motives and future plans for the Sudbury operations. Actions and decisions made during the 11 month strike have tarnished Vale’s reputation not only in the Sudbury area, but province-wide, and possibly internationally. Unions from across the world weighed in on the labor dispute. In January 2010, the trade magazine Metal Bulletin described Vale’s hard line as an attempt to break the union.

Reputation matters. Reputation impacts a wide variety of areas: consumer purchasing decisions, employee recruitment and retention, investment decisions, even how media covers your news [40]. From an outsider’s point of view, Vale does not seem very concerned with its reputation, choosing to place profits ahead of its people.

USWA Local 6500 also needs to rebuild and revamp its reputation. Given the lack of community support received during the strike, the actions of certain members, and the harsh and hateful words spoken during the dispute, the union has a long road ahead of it if it is to restore its reputation to where it was prior to the strike.

The almost year long strike became a classic labor/management struggle between a large international company and a strong bargaining unit with a long history of labor conflicts. During the strike, Vale seemed to want to aggravate the union and the strikers by hiring replacement workers to continue operations, firing employees for alleged misconduct, suing the union and even going as far as spending millions of dollars on extra security and surveillance.

On the other side, USWA Local 6500 made inflammatory statements, discarded court decisions regarding picket line protocols, encouraged violence against so-called scabs by posting their photos and addresses on public websites, and threatened civil disobedience if Vale persisted with its plans to re-start operations [41].

The final result of this strike is a community that has lost respect for both sides. The reputation of both parties has been seriously tarnished. While USWA Local 6500 has its local membership to assist in rebuilding its image, Vale has a much more difficult task ahead of it. Can Vale overcome the reputation and image its employees and some members of the Sudbury community now have of it?

Employee Relations

In mid-July 2010, Vale began the employee recall process. The company had a lot of ground to cover if it was to rebuild the labor and employee relations that had been sorely tested in the past year, and regain and possibly improve its productivity levels.

In a public statement posted July 21, 2010, Roger Agnelli, Chief Executive Officer of Vale, was quoted as saying that he was glad that the company management could now go back to work and manage the way they should, emphasizing merit, discipline and teamwork. He also spoke of the long history of USWA Local 6500 strikes, labor strife everywhere USWA represented unions are located, and blamed the union’s lack of willingness to accept change for letting the strike go on for as long as it did [42].

This was seen by some of the media and the USWA executive as Vale going out of its way to perpetuate the negative feelings and bad faith that was generated during the strike. It certainly did nothing to foster trust, goodwill and respect between the company, its employees, and the union [43].

On July 26, 2010, eighteen Sudbury Steelworkers received their pink slips by telephone before they even had a chance to return to work. Vale indicated that the layoffs were necessary in order to balance staff levels in its plants. The company stated that although 150 employees who were members of USWA Local 6500 had indicated that they would be retiring or not returning to work, it was not enough. The company would not confirm whether or not more layoffs were planned [44].

Community Partnerships

Traditionally, Sudbury has been a union town. When one union went on strike, all the others would support them and assist in any way they could. But that was Sudbury of days gone by. With its diversified economy, Sudbury is no longer a union town made up of blue collar workers. Of the unions that remain, membership is not as strong or as militant when it comes to automatic support of other bargaining units, particularly if they are in a different sector, which was the case in the 2009-2010 Vale dispute.

In the majority of the community not directly impacted by the strike, support was practically non-existent for USWA Local 6500. USWA Local 6500 has a lot of work to do if it hopes to rebuild valuable relationships in the Sudbury community.

As for Vale, it needs not to rebuild, but to literally start from scratch. Since 2006, Vale has done little to forge any type of relationship with the community of Sudbury. The management has not been visible and there is a definite lack of trust regarding Vale’s future plans for its Sudbury operations.
Although building relationships with all levels of government is important to both organizations, they must not disregard some of the other sectors, including the non-profit sector. For example, the Alzheimer Society of Manitoulin –Sudbury has organized an Alzheimer Coffee Break as one of its annual fundraising activities for the past several years, in which Inco and Vale both participated.

As of late September, however, Vale had not responded to multiple telephone calls and email messages from the Alzheimer Society, missing its deadline to participate. Conversely, USWA Local 6500 was approached in June 2010 while still on strike to co-sponsor the Alzheimer Society “Sponsor a senior” day program. Not only did USWA Local 6500 agree immediately, they sponsored two seniors for a year [45].

After the strike

“Besides making our Canadian employees’ pension and variable pay regime more similar to the successful system already in place in other countries, the deal removes restrictions and interference in managing the company, thereby aligning our operational efficiency in Canada with our practices elsewhere.”

Roger Agnelli,
Vale President and CEO
July 16, 2010 [46]

The longest strike in Sudbury’s mining history is over. After a long, difficult year, it will take some time to get over all that transpired on both sides during this labor dispute. The union has the advantage of being on site in Sudbury to start the rebuilding process immediately. Vale has done nothing since the strike to improve its image and reputation, and has in fact increased negative perception with both the union and the membership.

What is the future of mining in Sudbury? Actual mining will probably continue to diminish its footprint in Sudbury while other sectors continue to grow. Now a small piece of a much larger conglomerate, Sudbury is unlikely to be of much interest to Vale, but they will still keep an eye on their investment. Vale has created a new generation of activists in the union, an unintended consequence they may live to regret in future contract negotiations. As for its reputation, it remains to be seen if there will be any long term and widespread impact.

References

[1] Vale website (2010) Retrieved July 2010 and August 2010 from

http://nickel.vale.com/

[2] Gray, J. (2010). We’ll think no more of Inco. Report on Business magazine. Retrieved
from

http://find.galegroup.com.libaccess.lib.mcmaster.ca/gtx/infomark.do?&contentSet=IACDocuments&type=retrieve&tabID=T004&prodId=CPI&docId=CJ222195364&source=gale&srcprod=CPI&userGroupName=ocul_mcmaster&version=1.0

[3] A failure to communicate clashing work cultures, lack of mutual respect to blame for 8-month strike in Sudbury, former top executive says. Business (2010). Retrieved from

http://find.galegroup.com.libaccess.lib.mcmaster.ca/gtx/infomark.do?&contentSet=IACDocuments&type=retrieve&tabID=T004&prodId=CPI&docId=CJ222311891&source=gale&srcprod=CPI&userGroupName=ocul_mcmaster&version=1.0

[4] Vale website (2010)

[5] INCO Ltd. (2002). INCO limited – company history. Retrieved September 5, 2010, from

http://www.fundinguniverse.com/company-histories/Inco-Limited-Company-History.html

[6] Vale website (2010)

[7] Vale (2010). Sustainability Report 2009. Retrieved from

http://nickel.vale.com/sustainability/reports/pdf/sustainability-report-vale-full-2009.pdf

[8] Zack’s Investment Research. (2010). Vale’s terrific results. Retrieved August 2, 2010,
from

 http://www.dailymarkets.com/stock/2010/07/30/vales-terrific-results/

[9] Gray, J. (2010). We’ll think no more of Inco.
[10] Connors, Stompin’ Tom. Sudbury Saturday Night. Boot Records. 1967.

[11] Greater Sudbury Development Corporation. (2008). Greater Sudbury History. Retrieved September 5, 2010, from

http://www.mysudbury.ca/Invest/Sudbury+Basics/H

[12] Gray, J. (2010). We’ll think no more of Inco.

[13] Vale website (2010)

[14] Gray, J. (2010). We’ll think no more of Inco.

[15] Vale Inco workers end bitter, year-long strike; 75% vote for 5-year deal ends ‘historic’ conflict. News (2010). Retrieved from

http://find.galegroup.com.libaccess.lib.mcmaster.ca/gtx/infomark.do?&contentSet=IACDocuments&type=retrieve&tabID=T004&prodId=CPI&docId=CJ231006680&source=gale&srcprod=CPI&userGroupName=ocul_mcmaster&version=1.0

[16] Gray, J. (2010). We’ll think no more of Inco.

[17] News, Vale Inco workers end bitter, year-long strike;

[18] Atkins, M. (2010). 16 tons and what do you get. Northern Life, July 20, 2010. Retrieved from

 http://www.republicofmining.com/2010/07/20/the-vale-inco-stike-of-2009-2010-leaves-a-bitter-legacy-in-sudbury-by-michael-atkins/

[19] Where upper-class incomes are earned underground. News (2008). Retrieved from

http://find.galegroup.com.libaccess.lib.mcmaster.ca/gtx/infomark.do?&contentSet=IACDocuments&type=retrieve&tabID=T004&prodId=CPI&docId=CJ179122166&source=gale&srcprod=CPI&userGroupName=ocul_mcmaster&version=1.0

[20] Campanha Justiça nos Trilhos. (2010). Call to 1st international meeting for those affected by Vale. Mines and Communities, Retrieved from

http://www.minesandcommunities.org/article.php?a=9831

[21] International Movement of those Affected by Vale. (2010). International open letter of those affected by Vale – April 2010. Mines and Communities, Retrieved from

http://www.minesandcommunities.org/article.php?a=10075

[22] Mulligan, C. (2010) Nobody Voted for that Contract. Sudbury Star, July 19, 2010 Retrieved from

 http://www.thesudburystar.com/ArticleDisplay.aspx?e=2663474

[23] Business, A failure to communicate

[24] Mulligan, C. (2010). Gerard: We won’t let it happen. Sudbury Star, May 6, 2010. Retrieved from

http://www.sudburystar.com/ArticleDisplay.aspx?e=2539386

[25] Ulrichsen, H. (2010) Fera looking forward to retirement. Northern Life, July 26, 2010. Retrieved from

http://www.northernlife.ca/news/localNews/2010/07/fera-220710.aspx

[26] Ulrichsen, H. (2010) Patrick Veinot tapped as Local 6500 vice-president. Northern Life,August 4, 2010. Retrieved from

http://www.northernlife.ca/news/localNews/2010/08/veinot-vp-040810.aspx

[27] Fombrun, C. J., & Van Riel, C. B. M. (2004). Fame & Fortune: How successful companies build winning reputations. Upper Saddle River, NJ: Pearson Education.

[28] News, Vale Inco workers end bitter, year-long strike

[29] Vale News. (2010, July 16). Canada and Sudbury are very important to Vale. Vale News,Retrieved from

http://www.republicofmining.com/2010/07/21/canada-and-sudbury-arevery-important-to-vale-by-roger-agnelli/

[30] Mulligan, C. (2010). A new war of words; Vale CEO’s Remarks: Union finds statements offensive. Sudbury Star, July 22, 2010. Retrieved from

http://www.thesudburystar.com/ArticleDisplay.aspx?e=2680227

[31] News, Vale Inco workers end bitter, year-long strike

[32] News, Where upper-class incomes are earned underground

[33] Gray, J. (2010). We’ll think no more of Inco.

[34] Bradley, B. (2009). Vale Inco refusing to co-operate with union. Northern Life, March 10, 2009. Retrieved from

http://www.northernlife.ca/News/LocalNews/2009/union_statement100309010.aspx

[35] Hill, M. (2010) Labor Minister to meet Vale and striking Sudbury workers Retrieved from

http://www.miningweekly.com/article/labor-minister-to-meet-vale-and-strikingsudbury-workers-2010-06-30

[36] Gray, J. (2010). We’ll think no more of Inco.

[37] Hill, M. (2010) Labor Minister to meet Vale and striking Sudbury workers

[38] NDP (2010) New Democrats Table Bill to Strengthen Investment Canada Act. Retrieved August 2, 2010, from

http://www.ndp.ca/press/new-democrats-table-bill-tostrengtheninvestment-canada-act

[39] Hill, M. (2010) Labor Minister to meet Vale and striking Sudbury workers

[40] Fombrun, C. J., & Van Riel, C. B. M. (2004). Fame & Fortune:

[41] Mulligan, C. (2010). Gerard: We won’t let it happen

[42] Vale News. (2010, July 16). Canada and Sudbury are very important to Vale.

[43] Fera, J. (2010). Vale still bitter over year-long Sudbury mining strike. Republic of Mining, July 26, 2010. Retrieved from

http://www.republicofmining.com/category/vale/

[44] Mulligan, C. (2010). 18 steelworkers laid off at Vale: Workers got their “pink slip” by phone. Sudbury Star, July 28, 2010. Retrieved from

http://www.thesudburystar.com/ArticleDisplay.aspx?e=2686916

[45] Personal discussion with Patricia Montpetit, Executive Director of the Manitoulin-Sudbury Alzheimer Society, September 15, 2010.

[46] Vale News. (2010, July 16). Canada and Sudbury are very important to Vale

END

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