ALCOA CLASH
ALCOA, BIG LABOUR AT LOGGERHEADS IN LOCKOUT
IT’S A SHOWDOWN BETWEEN BIG BUSINESS VERSUS BIG LABOUR IN A SMALL QUEBEC TOWN.
Workers of the Alcoa Corp.-controlled Becancour smelter in Quebec stand guard under umbrellas outside the gates. Whenever a vehicle approaches, a pair scurries to take down the driver’s details and make sure there’s no scab labourer in disguise.
The ritual, witnessed on a rainy August morning, has become part of life at the aluminum plant since January, when the company locked out more than 1,000 employees represented by the United Steelworkers union. The entrance is also where tensions have flared as the conflict, which started over pensions and recruitment rules, turned into a deadlock.
For Pittsburgh-based Alcoa, the dispute has resulted in a production decline at the plant, adding to pressures resulting from U.S. aluminum tariffs that have hit its three smelters in Canada.
The company is now seeking deeper changes — including reduced payrolls — to make the plant more competitive. For their part, workers say they’ve already made concessions and are fighting to retain seniority rights.
From the point of view of the mayor of the town on the Saint Lawrence River, the situation looks like a battle of principles between Big Business and Big Labour which both feel they can’t afford to lose.
“It’s a clash of the titans,” says Jean-Guy Dubois, mayor of the town of 13,000 two hours northeast of Montreal. “Becancour has become the stage where it happens, and we’re the victims.”
The on-and-off-again jostling has added to the turmoil in metal markets. In addition to placing quotas or tariffs on most U.S. aluminum imports, the Trump administration also has imposed sanctions on Russian producer United Co. Rusal, the world’s largest supplier outside China, as well as opening talks to rejig NAFTA. As a result, premiums — the amount added to aluminum prices to ship in the U.S. — have more than doubled this year, and benchmark prices in London spiked in April.
The lockout at Becancour could curtail 280,000 metric tons this year from the global market, Bloomberg Intelligence senior analyst Andrew Cosgrove estimates. While that’s less than one per cent of global output, the stoppage is a “net negative” for Alcoa, which owns 75 per cent of the plant (Rio Tinto Group owns the remainder). The lower production could translate into about US$430 million in lost revenue for Alcoa, or three per cent of projected 2018 sales, Cosgrove says, though the company could make up part of that elsewhere.
Jorge Vazquez, a managing director at industry researcher Harbor Intelligence, said the company’s willingness to lose money at Becancour is sending a broader message to the aluminum workforce in Quebec.
“For future negotiations with other labour unions and smelters, I think this is a bigger statement than just ABI,” Vazquez said, referring to the Quebec plant by its formal name Aluminerie de Bécancour Incorporée.
“They do mean what they say.” Alcoa currently faces another labour conflict at its alumina operations in Western Australia, where workers are striking over a new labour deal they say doesn’t contain any job security provisions.
The United Steelworkers want to pick up the Quebec negotiations where they were left at last year.
Clement Masse, the head of the union’s ABI chapter, said workers had agreed to overhaul pension funding — a liability Alcoa has worked to sort out at other plants — but that disagreements remained over rules to fill vacant jobs when ABI came up with a final offer in December. The workers rejected it in January, the company curtailed two of three smelting lines and managers took over the remaining operations.
Strains permeated negotiations when they resumed in June under the mediation of former Quebec premier Lucien Bouchard.
Those talks hit a roadblock when ABI asked to reduce the payroll size by attrition — 185 positions, according to the union.
A union delegation met with Alcoa executives in Pittsburgh last week, saying afterward that the parties “discussed possible solutions that we could pursue to try to break the impasse.”
Alcoa said the meeting “was constructive in terms of the steps needed to achieve a new collective agreement and position ABI for long-term success.”
According to the company, a third of the plant has been operated by just 115 managers with record efficiency, showing a reorganization is needed — including a reduced head count. It says the plant has lagged “many of its peers” in productivity and profitability.
The managers “have restored stability and improved metal quality to standards not previously seen at the facility,” Alcoa spokesman Jim Beck said in an e-mail. “So we know improvements are possible.”
The union contends that ABI is using scabs to get to that result, an allegation that is denied by Alcoa and under examination by an administrative court. Masse said the current conditions wouldn’t be sustainable over a longer period.
The company also is in the midst of a wave of retirements and is seeking flexibility to staff the plant without having too many workers change jobs at once.
According to the union, that means it wants to recruit externally, a break from past agreements that reserved the positions for current employees.
Locked-out workers don’t understand why the company has let the situation drag on.
“Tensions have been rising, from our side as well as from theirs,” says Claudia Tremblay, a technical assistant employed at the smelter since 2012. “There needs to be an ending.” The tensions can be felt at the gates. Managers, who in the early days would drive in and stop for a chat, are now bused in. Workers have used camcorders to film unfamiliar faces behind the windows of incoming vehicles.
ABI has sought legal action to enforce a court order on picketing rules because access to and from the plant “has been slow, difficult and intimidating,” Beck said.
Alcoa CEO Roy Harvey told analysts in July that he sees the talks as a chance to effect real change because the company wants to invest in ABI for the long term.
For Mayor Dubois, a resolution can’t come fast enough.
“I will probably have my own little party on the day I hear it’s sorted,” he said.
TENSIONS HAVE BEEN RISING, FROM OUR SIDE AS WELL AS FROM THEIRS.