Strike Would Hit Community Hard

By Denis St. Pierre
 
A strike at Vale Inco's Sudbury operations could result in an immediate contraction of 5 to 10% in the local economy, with the impact growing steadily as the dispute progresses. The 3,000-plus members of the United Steelworkers union, who could be on strike as early as Sunday night, represent about 5% of the local workforce. But their relatively high incomes may account for up to 10% of local consumer spending, noted economist David Robinson.

In the event of a strike, "I would say you could expect a decrease in spending of about 5% off the top, right way, and then it gradually grows as it goes on," said Robinson, a Laurentian University professor.

In the initial stages, the local impact of a strike can vary significantly, "depending on whether (the strikers) think it's going to be short or whether they're afraid it's going to be a long one," he said. Regardless, "it's still a real setback" for many local businesses and employees, as well as the strikers and their families.

A 5% decrease in consumer spending would not translate into a 5% cut in the local workforce, Robinson noted. But hundreds of jobs could be at stake, even in the early stages of a strike. The first businesses that would be forced to lay off workers or take more drastic action would include companies in the mining supply and services sector, Robinson said.

Some retailers also would be forced to cut costs. "It's like a tide on a beach," Robinson said. "Some businesses are already on the water's edge and as the tide comes in, they're overtaken. Other businesses are further up the beach" and can withstand the rising tide, for various lengths of time.

Even without a major labour dispute in the city, the Conference Board of Canada recently predicted Greater Sudbury's economy would contract by 4% this year, before returning to modest growth in 2010.

A Vale Inco strike "obviously would have an impact" on local mining supply firms, said Dick DeStefano, executive director of the Sudbury Area Mining Supply and Service Association. "I mean, you're taking $480 million (annually) in products and services out of the mix," DeStefano said. "Some companies are going to have to diversify and look for other business and other markets. "But our companies have recognized this and they've started preparing for it," he added.

"But it will affect them and the impact on the community in general will be significant." DeStefano has estimated the local mining supply and service sector has shed at least 1,000 jobs since last fall.  Still, "our members are very agile and ... resilient," he said. "We've had no major closings or bankruptcies."

Mayor John Rodriguez said Monday he did not want to comment on the potential impact of the "very speculative" scenario of a strike at Vale Inco.

Vale and the Steelworkers still have until Sunday at least to negotiate a settlement, Rodriguez emphasized, adding he is steering clear of saying anything that could inflame the situation or have an unwanted impact on the outcome.