PotashCorp strike into 9th week with no talks
09 October 2008 19:45 [Source: ICIS news]
HOUSTON (ICIS news)--Shares of Potash Corporation of Saskatchewan (PotashCorp) remained under downward pressure on Thursday, lending support to the company's economic arguments in its dispute with workers who have now been on strike for nine weeks.
The labour strike at three PotashCorp plants appeared no closer to an end, despite efforts earlier in the week by the company and the United Steelworkers union (USW) to resume talks after a two-month stalemate.
Shares in PotashCorp, the biggest producer of potash fertilizer, had lost 63 cents/share, or less than 1%, to trade at $97.97/share (€71.52/share) on the New York Stock Exchange. The stock has fallen from an all-time high in June of more than $240/share.
On Monday, the USW delivered a letter to the company formally requesting that talks resume, both sides of the dispute said. It was the first official contact between the union and PotashCorp since mediation broke down and a strike began on 7 August.
PotashCorp said it was willing to resume bargaining, but only if USW backed off its support of a proposed commodity-based bonus scheme. The union refused, prompting the company to send a letter to USW saying there was no “rationale for returning to the table”.
According to the letter, which was obtained by ICIS news and signed by lead company negotiator Aaron Fornwald, PotashCorp implied it would not agree to new talks with the union so long as USW continues pushing for the bonus scheme.
“We are not interested in a modified proposal and believe it to be misleading to return to bargaining with the union retaining their current position on a bonus program,” Fornwald wrote.
Fornwald also argued the striking labourers should take current economic considerations in mind.
“This situation has caused us to pause and re-assess our position with respect to our offer for a collective agreement. Based on these new developments, I am writing to indicate that the company no longer has financial flexibility on our final monetary offer,” Fornwald wrote.
Some 500 members of the union have been on strike since mediation broke down in August at the company’s 2m tonne/year plant in Allan, 800,000 tonne/year plant in Cory and 300,000 tonne/year plant in Patience Lake. All three facilities produce potash fertilizer and are located in Canada’s Saskatchewan province.
The sites in Cory and Patience Lake have since been shut down directly because of the labour dispute, while management workers from the three facilities have been pooled together to operate the Allan plant at half capacity.
Potash is perhaps the tightest global fertilizer market, with demand routinely far outstripping supply.
Spokespeople for both PotashCorp and the union did not immediately return messages on Thursday.
($1 = €0.73)
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Author: David Rosen713-525-2653
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