The Facts

Vale has $22 Billion US (cash assets as of 31 March 2009).

PROFITS:

  • Vale had $13.2 Billion US PROFIT last year (2008 after-tax profit).
  • Vale has made twice as much profit in 2 years, as Inco made in past 10 years.
  • Vale Inco collected $4.1 Billion US profit from Ontario two years (2006-2008).
  • Inco collected $2.2 Billion US in Ontario profits in 10 years (1996-2006).
  • Vale has collected big profits every year, even during economic recessions.

NICKEL BONUS:

  • Vale trying to eliminate bonus that pays nothing in hard times (currently $0).
  • Nickel bonus only applies in conditions of profitability. It’s a way of sharing in good times and protecting company in bad times.

EXECUTIVE PAY:

  • Six executive officers paid $33 Million US (2008).
  • Vale executive officers pay increased 121% in last two years.

Payment to Vale Executive Officers (in Millions)

Year Fixed
Salary		 Variable
Pay		 Total Pension
Benefits		 Board
Payment		 Common
Shares		 Preferred
Shares		 Change in
total pay
from 2006
2008 $ 0.90 $ 24.0 $ 33.0 $ 0.8 $ 0.9 158,535 1,051,416 121%
2007 $ 8.3 $ 15.9 $ 24.2 $ 0.7 $ 0.8 166,922 888,504 62%
2006 $ 6.0 $ 8.9 $ 14.9 $ 0.9 $ 0.6 58,480 285,341  

WORKERS’ PAY:

  • Vale Inco workers make $29 per hour (current average wage).
  • Vale Inco workers make $0.00 bonus (current hourly bonus).
  • Vale Inco workers previously made $4.86 bonus (average for past decade).
  • Labour accounts for less than 1/10th Vale’s costs.
  • Workers already took cut in income in last six months, because bonus is zero ($0).
  • Salary for those working thousands of feet below ground that Vale wants to cut: $29 per/hr.
  • This is very hard, dangerous work that deserves middle-class compensation.
  • Because of bonus structure, workers currently get zero in bonuses ($0), but Vale wants much further claw-backs, including two-tiered pensions and challenged seniority.

 

The fact is that in the past two years, Vale has extracted twice as much profit from Ontario, as Inco had in the previous 10 years.

We understand these are very difficult economic times, and we let this fact guide us during the entire negotiating process. However, Vale’s focus has not been on trying to find ways to get through these difficult times. (Given they have $22 Billion US of cash assets on hand, you can see why they are not as concerned about this issue as we thought they would be.)

Rather, their main focus has been on dramatically reducing a benefit that does not pay a single cent now (or in any economic hard time).

The nickel bonus is an innovative mechanism developed by Inco and USW to allow workers to partially benefit in good times and to help protect the company in bad times. The fact that Vale is attacking this benefit (that currently pays nothing) shows they are not motivated by the current economic situation.

Vale would rather use this moment to attack a fair mechanism knowing that good times will eventually return.

At the same time, it appears Vale is quite willing to give its senior executives a share of the profits now. Total compensation to the top six Vale executives increased by 120% in the last two years (from 2006 to 2008).

Still Vale insists they need to radically impose these concessions from their Canadian workers.

We believe that every person who lives or works in the communities of Sudbury, Port Colborne and Voisey’s Bay should recognize that the health and viability of their community is being threatened.

The question is not whether Vale Inco can survive this economic recession. Their profits answer that question. The real question is whether our communities will have the crucial middle-class family incomes when we eventually come out of this recession.

For Canada, the question is whether our natural resources, and the hard and dangerous jobs involved in their extraction, can provide the reliable and hardworking families a middle-class compensation.

For foreign companies to extract those Canadian resources and reap such substantial profits, but not provide our families and communities with hard-working secure incomes is just not right.

We ask for, and appreciate, your support.
Respectfully,

USW locals 6500, 6200 and 9508