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Northern Daily News, 10 July 2009

By Carol Mulligan 

More than 3,000 production and maintenance workers with United Steelworkers Local 6500 will decide this week if an altered pension plan, a smaller nickel bonus and restrictions on how often they can apply for new jobs are reason enough to strike.

Vale Inco's final offer to members of USW Local 6500 in Sudbury and Local 6200 in Port Colborne is calling for their defined benefit pension plan to be discarded for anyone hired after June 1, 2010, and replaced with a defined contribution pension plan.

The defined contribution plan has already been introduced for Vale Inco staff, many of whom are said to be unhappy with the change, said Homer Seguin, a former president of Local 6500 and longtime Steelworkers’ activist.

The basic difference, Seguin said Tuesday, is that the current pension plan guarantees workers a set pension amount upon retirement. Under the new plan, pensions would be based on what employees and Vale Inco contribute.

Seguin said the new plan has employees assuming the risk of their pension contributions instead of the company. Pensions are concern for Roger Agnelli, chief executive of Brazilian-owned Vale S. A. Estado news agency reported Agnelli as saying his company would not give way on altering pension plans for Vale Inco personnel. Agnelli said benefits would be paid according to contributions.

"We have already seen several companies go bust because of holes in their accounts caused by their pension funds," Agnelli said, according to a published report from Dow Jones Newswires.
Vale won't put the financial health of the company at risk over this question, Agnelli said.

Agnelli also said that Vale's Canadian operations were more expensive. "If we hadn't bought Inco, perhaps it wouldn't now be even alive," he said. "We want the best for the company and the employees. The company must have financial health."

Seguin said the new pension plan would not offer employees the guarantee of a "livable income" once they retired.

Bargaining team members for both Steelworkers and Vale Inco have not spoken about details of negotiations, but Seguin was outraged to see the company is looking to cut miners' nickel price bonus in two ways.

First, the company wants to raise the nickel price bonus trigger to $5 an hour from $2.25. It also wants to limit the maximum bonus payable to 20% of an employee's regular straight time annual income.

Seguin was on the negotiating committee that won the nickel bonus in 1985. He said it was introduced when the company was not making profits, but promised employees would share the wealth when nickel prices were high.

He called it a "strict grab" that Vale Inco was trying to eliminate what the union had won more than two decades ago. Montreal-based nickel analyst Terry Ortslan said Tuesday that he believes $5 is a fair trigger for the nickel price bonus because the days of $2.25 a pound nickel are gone. He also said it is not unreasonable for the company to try to cap the nickel price bonus.

But Orstlan also defends the rights of Steelworkers to hang on to benefits negotiated with their former employer, Inco Ltd., over the years. Agnelli called Sudbury the world's most expensive mining force Tuesday and Orstlan has expressed that opinion on several occasions.