UpdatePotashCorp plans no weekend strike talk

26 July 2008 00:32  [Source: ICIS news]

(Updates throughout)

HOUSTON (ICIS news)--Potash Corp of Saskatchewan (PotashCorp) had no planned weekend negotiations with a union threatening to broaden its strike next week, a company spokesperson said on Friday.

About 550 workers at facilities in Cory, Allan and Patience Lake announced on Friday they would not work overtime starting on Saturday morning.

United Steelworkers spokesperson Lee Edwards said the union may begin a rotating strike as early as Monday if no agreement is reached over the weekend.

Company spokesperson Tom Pasztor said PotashCorp had no negotiations planned for the weekend. He said was not sure how a rotating strike would affect production at the three facilities, which have a combined fertilizer capacity of 1.3m tonnes/year.

“In terms of the rotating strike, it depends on how they choose, how they would reflect what sites would be down at what times and for what lengths of time,” Pasztor said.

Edwards said the union chose a rotating strike as its next course of action to minimise the affect on production at the three facilities.

Any cutback on production could drastically affect potash fertilizer prices, which have more than tripled in the past year and allowed PotashCorp and other North American fertilizer companies to flourish.

The disagreement over how the company’s record-breaking profits should be reflected in worker salaries lead to the union action, Edwards said.

A day after PotashCorp said high fertilizer prices allowed the company to triple its profits, the workers announced they would begin a strike to demand higher wages.

The union wanted to see minimum wages for select certified employees at the plants increased from $31/hour (€20/hour) to $41/hour, Edwards said.

PotashCorp’s counteroffer was a 7% increase in 2008, following by 5.5% increases in 2009 and 2010, according to Edwards and a local newspaper.

The two sides have met with each other more than 40 times since April and have yet to reach an agreement.

Potash fertilizer was traded for less than $300/tonne in 2007, and now costs as much as $920/tonne FOB (free on board) Vancouver, according to global chemical market intelligence service ICIS pricing.

The company’s share prices dropped $1.25 in after-hours trading late Friday to reach $201.02 on the New York Stock Exchange.

Earlier this week, traders expressed concern that as long as high fertilizer prices persist, an incentive may remain for workers at other companies to demand better wages, which could unsettle the industry.

On Thursday, PotashCorp Chief Executive Bill Doyle called his company’s offer “extraordinary” and said it would make the employees the highest paid potash miners in the industry.

Edwards disputed that claim, and said several local rival mines and Canadian oil companies were recruiting PotashCorp employees with incentives like higher salaries and retention bonuses.

“We have mines that are just north that pay $10/hour more, and we also have the oil patch in Alberta, who are again actively recruiting.,” Edwards said “We can’t afford to lose our trades [certified workers]. These are production facilities,” Edwards said.

Another union concern was forced overtime, Edwards said. Workers at the three facilities put in 147,000 hours of overtime in 2007, mostly at Allan and Cory, he said.

The striking workers include about 270 people in Allan, 220 in Cory and 50 in Patience Lake, Edwards said.

Pasztor would not comment on whether PotashCorp was concerned about potential strikes at other company facilities, or whether Doyle would personally get involved in the negotiations.

Pasztor also would not say whether the company was considering locking the union employees out of the three facilities on Monday.

($1 = €0.64)

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By: David Rosen
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