Friday, July 25, 2008

Why I have problems with "most" unions

I agree that some existence of union is necessary - that is to protect some basic rights of workers (i.e. safety, workplace conditions, and to prevent close to "slavery wages").

However, the following is why I have problems with many unions and their cronies:

- "the workers wanted a share of Potash Corp's soaring revenues," and

- "they [the workers] are the ones who have done the work underground and on the surface to produce the product that's been sent around the world and made this company the money that it has."

What about the management and investors? If there is no management to plan and coordinate production, and if there is no investors (shareholders of the company) to take the risk, those workers would not even have jobs (a footnote here: Potash Corp. was a crown corporation until the 90s, and is now the second largest company in Canada, in terms of market value.)

Now, did workers' job nature changed much, over the past two years, that produced such a huge jump of revenue for Potash Corp.? I highly doubt it. Not to mention mining potash is much safer than mining coal and other minerals.

The sole reason of such a high revenue for the company is because of high commodity price in fertilizer in the global market (hence, Potash Corp. is now flushed with cash.) It has everything to do with supply and demand, and I believe that shareholders and management (in some degree, because of excellent strategic positioning the company in the past decade) should be the first ones to be rewarded before workers.

Workers?? Yes, they should be rewarded as well, but not as much as the other two stakeholders.

If the price of potash crashes tomorrow, and Potash Corp. is in a crunch and demand a wage reduction from it workers, I wonder if the union will say "the workers wanted a share of Potash Corp's burden, and will take a substantial pay cut voluntary."

Now, I have to give an applause to Buzz Hargrove - which he did exactly the above a few months ago in his negotiations with the "Big 3" (however, I am still not too sure if those three companies can be saved - even with concessions from CAW). As much as I dislike Buzz, he deserves that credit, for once.

According to the latest development, Potash Corp. has offered their workers to become "the highest-paid potash miners" in the industry - global-wise speaking. I hope the union will not get too greedy and reject such an offer.


PUBLICATION: The StarPhoenix (Saskatoon)
DATE: 2008.07.22
SECTION: Business
BYLINE: Cassandra Kyle


Potash Corp union holds strike vote


Unionized employees at Potash Corporation of Saskatchewan's Allan, Cory and Patience Lake mines held a strike vote Monday after being without a collective bargaining agreement since April 30.

United Steelworkers (USW) District 3 staff representative Lee Edwards confirmed Monday afternoon the vote was underway at Saskatoon's Confederation Inn. Vote results were to be returned either late Monday evening or today, she said.

Potash Corp spokesperson Bill Johnson said the company is hoping a settlement will be reached soon.

"We remain very hopeful that we can reach a settlement with all three unions," he said. "We value our workers a great deal. We think they are the best in the industry, and we certainly hope we can come to an agreement with them."

Of the nearly 600 people who worked at the three mines in 2006, nearly 500 are represented by a USW collective agreement. USW District 3 staff representative Mike Park said in an earlier interview with The StarPhoenix that safeguards would be put in place to protect employees if the April 30 deadline passed without a deal.

Speaking in March, Park said the workers wanted a share of Potash Corp's soaring revenues. In 2007, the company recorded a net income of $1.1 billion.

"They're the ones who have done the work underground and on the surface to produce the product that's been sent around the world and made this company the money that it has," Park said of the employees.

The union rep added there needed to be a balance between revenues and wages.

"It's not unusual when we get to bargaining . . . to sit down and look at the economy of the day to see where we're going to go," he said.

On Thursday, the same day the company celebrated the completion of $410 million in expansions at its Lanigan mine, Potash Corp announced plans to increase its potash production by 2.7 million tonnes to 18 million tonnes by the end of 2012.

On Wednesday, Canpotex, the offshore marketer for Saskatchewan potash, raised its spot price for some Asian buyers to $1,000 US per tonne.


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