Inco contract on chickens coming home to roost.

• Author: Atkins, Michael
• Position: PRESIDENT'S NOTE

A couple of weeks ago, Buzz Hargrove, the feisty (I'm being kind) president of the Canadian Auto Workers (CAW) union said they would go on strike against General Motors (GM) if the auto maker did not promise new car products for Windsor, Oshawa, and St. Catharines, Ontario.

A few days later, he changed his tune completely. "You strike after something you think is achievable," he said. "If we thought there was a product out there that we could strike and fight and win, then you can bet your boots we would be striking over it."

Of course, what happened between the ultimatum and the climb down was that GM announced unceremoniously it would close a transmission plant in Windsor, whether the union liked it or not. Buzz is now negotiating severance packages, not new jobs.

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All of that was before they announced the closure of the truck plant in Oshawa two weeks after signing a new agreement, which came perilously close to bad faith bargaining. GM is retreating as fast as it can to a size that makes economic sense. Its business is in disarray.

The problem here is not a new one. All sorts of unions which in an earlier day fought courageously for workers' rights and safety have squandered their gains by taking no interest in the economic viability of the industry that pays their wages. They feel little or no responsibility to be a part of the solution now that they are full partners. As a result, they are getting no say in the solutions.

In a year's time Vale Inco will likely lock out its employees in Sudbury or the union will strike over the value of the Nickel Bonus, which has been extremely lucrative for members of the United Steel Workers. Vale Inco has already sent a very clear message. They have delayed their maintenance shut down until the month before the contract is up. They will not start up again without a contract. That is usually the union position.

Vale has a problem. Few, if any, of their employees around the world have a commodity bonus that looks anything like the one in Sudbury. Neither do their managers. It sticks out like a sore thumb.

The union has a problem. They have little or no leverage. Yes, the price of nickel will be high and the opportunity cost will be substantial, but Vale can well afford a long strike. Sudbury represents a very small part of Vale's business.

Vale is a...