Vale Manitoba Operations said June 16 that it is launching a comprehensive review of its business model that will result in job cuts.
Manager Franco Cazzola says Manitoba Operations lost roughly $300,000 per day in operating funds in 2019.
“We need to find a simpler and more nimble operating model to ensure our future in Thompson,” Cazzola said in a business update emailed to the Thompson Citizen. “The first step will be a comprehensive review of the business. Adjustments to our operating model will be made based on the outcome of this review.”
Cazzola said these adjustments “will mean a smaller workforce than we have today. We will consider every option available to us to ensure any job reductions are as limited as possible, and we will ensure they will not impact the safety of our ongoing operations.”
Vale says it has invested nearly $1 billion over the last decade in its Manitoba business – “one we remain committed to for the future.”
The new model to help ensure the long-term sustainability of Vale Manitoba Operations is planned to take effect in the fall of this year.
Warren Luky, president of United Steelworkers Local 6166, which represents 552 hourly workers at Vale Manitoba Operations, said the announcement was a surprise and a disappointment to union members.
“They’ve indicated there’d be job cuts as early as November,” he said. “A lot of our members are in a lot of uncertainty. A lot of our members have gone through this before. It’s a big blow to anybody who works there and definitely a blow for the community at large where these job cuts are going to have an effect on people’s lives and the town.”
Seven months ago, then Manitoba Operations head Gary Eyres told the Thompson Chamber of Commerce that a $1 billion investment in the Thompson mines over the next five years could generate nearly $8 billion in economic activity over the next 45 years. He also said the company had about 30 fewer employees than it wanted and that there were no plans to cut any more jobs.
About 870 people worked at the mine at the end of 2018, a year that saw 250 layoffs due to the smelter and refinery shutting down permanently in mid-summer and another 180 positions cut as a result of early retirements, resignations and the elimination of non-unionized staff positions. That left it at about two-thirds of what it had been at the end of 2017, which saw about 120 job losses when Birchtree Mine was placed on care and maintenance status, where it remains.
Eyres was replaced less than year into his stint as Manitoba Operations manager by Cazzola, who formerly worked in Thompson from 2005 to 2008 and was most recently the manager of the Copper Cliff mine in Sudbury since August 2019 and of the Copper Cliff refinery since September 2018.
USW Local 6166 members accepted a five-year collective bargaining agreement in September of last year that included the introduction of a 20 per cent co-pay for prescription drug costs and the elimination of post-retirement benefits for future employees.
Luky says the workforce at the mines and mill is “trimmed pretty close” and that factors that can only be addressed through capital investments are affecting productivity.
“Our shaft is farther from the ore body,” he said. “When you’re getting farther away from the ore body, the harder it is to mine. A lot of things we didn’t get … that capital work before and we’re in a position now where its kind of catching up with us.”
He also says the announcement extends the cloud of uncertainty that has enveloped the operation for years.
“We’re just curious to see what their business plan is,” Luky said. ”We don’t know where they’re going with that, unfortunately. I can’t predict that. Uncertainty’s very stressful for a lot of our members, very stressful for the community at large.”