Alcoa Wants More Concessions at ABI, Despite Lowest Labour Costs

Locked-out smelter workers plan campaign to increase pressure for a fair settlement to nine-month lockout.

TROIS-RIVIÈRES, QC, Oct. 10, 2018 /CNW/ - Aluminum giant Alcoa is indicating clearly that it is not interested in settling a nine-month lockout of 1,030 employees at its ABI smelter in Bécancour, the United Steelworkers (USW) says.

Alcoa has demanded more concessions from the locked-out workers even though the ABI smelter has the lowest labour costs per unit production among all of Alcoa's facilities in North America, the USW notes.

The situation prompted former Quebec Premier Lucien Bouchard, appointed by the provincial government as a special mediator in the labour dispute, to suspend the mediation process last week.

The locked-out workers, members of USW/Syndicat des Métallos Local 9700, met Tuesday in Trois-Rivières to discuss the breakdown in negotiations as well as their plan to escalate a campaign to increase pressure on Alcoa for a fair settlement.

"Alcoa has demanded new concessions from workers several times during the negotiations. The company is trying to make workers bear the brunt of its bad decision to lock out its employees in the first place," said Clément Masse, USW Local 9700 President.

"The fact is that labour costs per tonne are lower at ABI than at any other Alcoa smelter in North America, including the non-unionized smelter in Deschambault, Que., and the unionized smelter in Baie-Comeau, Que. If any budget item is too high, it's electricity," Masse said.

Labour costs to produce one tonne of aluminium at the ABI smelter are $142.90, less than at any other smelter in North America. In comparison, labour costs per tonne are $145.30 at the Deschambault smelter and $157.60 at the Baie-Comeau smelter.

"Even if we were to slash labour costs in half, it still wouldn't make up for the electricity costs, which are higher in Bécancour than at the other two Alcoa smelters in Quebec," Masse said. "ABI is trying to blame its locked-out employees for the consequences of its own inability to negotiate better electrical rates with the Quebec government."

Costs per tonne at Alcoa smelters in Quebec:

Source: Commodities Research Unit compilation, 2016

A costly dispute

Workers have been locked out since Jan. 11 at the ABI smelter, which is co-owned by Alcoa (74.9% stake) and Rio Tinto (25.1%).

Quebec Steelworkers Director Alain Croteau said he is surprised to see Alcoa refuse to engage in meaningful negotiations.

"We're facing a party that is not acting rationally. Outsiders may think the lockout is an investment for Alcoa to make gains in the collective agreement over the medium and long terms. But there's no way that concessions from workers could make up for the costs of the lockout," said Croteau, who met this summer with Alcoa's senior management in Pittsburgh in the hopes of resolving the lockout.

"If you want to reach an agreement, you need to listen to the other party, capitalize on openings and be open to compromise when the other party is willing to change its position. Alcoa hasn't done any of that. It's as if the real issues aren't even at the negotiating table," Croteau said.

In addition to energy costs, which are higher in the Centre-du-Québec region than at other smelters in Quebec, another possible issue at play is rising aluminum oxide costs related to problems at the Norsk Hydro aluminum oxide plant in Brazil that supplies Alcoa.

The union plans to step up its strategic campaign to pressure Alcoa and Rio Tinto to resume meaningful negotiations needed to settle the ABI dispute, Croteau said.

"Alcoa and Rio Tinto are taking workers and the entire region hostage. We are going to increase pressure. The shareholders, financial markets and board members all need to realize how irrational this labour dispute is," he said.

Prior to the lockout, the union believed a settlement was achievable, with two key issues outstanding ? pension plan funding and seniority rights related to personnel transfers. Since the lockout began, publicly owned Hydro-Québec has lost more than $164 million in wasted and unpaid electricity, as ABI was able to invoke a force majeure clause to avoid its obligations to the utility.

Affiliated with the FTQ, the Syndicat des Métallos/United Steelworkers is the largest private-sector union in Quebec, representing 60,000 workers in all sectors of the economy.

SOURCE United Steelworkers (USW)