Wednesday, May 05, 2010

Strike is Costing Vale Big

Check out this analysis of the first quarter earnings report by Vale, the giant mining company against which several thousand Sudburians have been on strike since last summer. The conclusions? Whatever justification existed for demanding concessions has evaporated as the market has picked up, but the strike is costing Vale big money despite the song and dance about partially restarting production. The post concludes:

By any measure, the strike is costing Vale far more per quarter than the total annual cost of the United Steelworkers’ pension and bonus plans. By refusing to settle, Vale management is giving up more money than it could possible recoup through proposed concessions.

Shareholders would be better served if Vale abandoned its concessionary demands. Bringing Sudbury and Voisey’s Bay back to normal production by negotiating a fair deal would add hundreds of millions of dollars to Vale’s quarterly earnings.

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