Mine Mill & Smelter Workers - Local 598 / C.A.W.

   19 Regent Street South,

Sudbury, Ontario  P3C 4B7



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For Immediate Release

 February 21, 2006

 Extension is an Opportunity for Public Interest Review of

INCO-Falconbridge Merger

 Leaders of the Canadian Auto Workers union responded today to the announcement by INCO and Falconbridge that the closing date for their proposed merger has been extended to June 30, as a result of continuing investigations by U.S. and European competition authorities.

 “This proposed mega-merger is still very much up in the air,” said Rick Grylls, president of Mine Mill 598/CAW, representing Falconbridge members at mining, milling and smelting operations in the Sudbury area.

 “The repeated extensions of the closing date indicate this merger faces significant hurdles, from both regulators and investors.”

 The long extension raises major questions as to whether the merger will in fact proceed.  Swiss-based Xstrata will now have an opportunity to submit a competing offer for Falconbridge, with the expiry in May of its agreement with Brookfield Asset Management (formerly Brascan) to match the price of any subsequent Xstrata purchases of Falconbridge shares.  Bids from other potential suitors (including Teck Cominco) are also possible – for either Falconbridge, or for the combination of INCO and Falconbridge.  The fact that Falconbridge shares are trading for significantly more than the $34 INCO offer, suggests that investors are expecting further bids.

 The CAW has called for a comprehensive review of the public interest impacts of any merger involving INCO or Falconbridge, before it is allowed to proceed.  “A merger will have both costs and benefits for Canadians,” Grylls continued.  “It is essential for all stakeholders, including government, labour, and municipalities, to participate in developing a clear plan that sets binding targets to make sure that any merger respects the interests of Canadians.”

 Nickel Belt MP Ray Bonin attended the Mine Mill 598’s INCO/Falconbridge merger public forum on February 15th and stated that city council and all stakeholders should have a meeting to review the long term security of the community.  The CAW would welcome such an initiative.

 “We can’t simply trust any of these huge companies to do the right thing for Sudbury, or for Canada.  We have to hold them accountable.”

 Grylls called on Canadian regulatory authorities to play a more active role in reviewing the impact of any proposed merger.  “It is embarrassing that this mega-merger between two purportedly Canadian companies is receiving a more thorough review from foreign regulators, than from our own regulators.”

 In particular, Grylls called on the Investment Review branch of Industry Canada to look seriously at the implications of an INCO-Falconbridge merger for foreign ownership levels.  INCO is majority owned by foreign investors, mostly U.S.-based.  The CAW has also asked provincial and federal governments to review the merger more carefully, and make approval for the merger (or for subsequent development projects) contingent on commitments by the merged company to specific targets for Canadian investment, employment, and purchases.

 There has been some speculation about the impact of an INCO-Falconbridge merger on labour relations – most recently in the form of extensive published comments by leaders of the United Steelworkers of America (which has endorsed INCO’s proposed takeover) indicating that union’s desire to represent all workers at a merged company.

 “This whole takeover process is completely uncertain,” said Grylls.  “The financial wheeling and dealings are just getting started.”

 “Instead of jumping on the bandwagon of any particular takeover bid, we should all work together to win as much protection for jobs and investments in Sudbury as we possibly can.”

 In the event that a merger results in representation elections for workers at INCO and/or Falconbridge (a situation that will not likely occur until later in 2007, at the earliest), Grylls said he was confident that Canadian workers in the mines, mills, and smelters would choose a Canadian union to represent them.  “But it’s premature and counterproductive to start that battle now, with such an important decision regarding our economic future completely up in the air.”

 “Any union official who starts to dream about capturing new members is missing the more important question, which is how to hold all of these investors accountable to the Canadian public interest.”


 For further comment, Rick Grylls, 705-673-3661, ext 23 or 705-665-2138

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Merger Notes – Update, December 30, 2005

By now, pretty much everyone is aware that the deadline for completion of the merger between Inco and Falconbridge has been postponed and is now scheduled to occur on January 27th, 2006. This was done to allow Inco to meet anti-trust and regulatory conditions required by the U.S. government. Locally not much has changed, although the uncertainty caused by this deal is still in the air. Unfortunately, not all of the answers are available for the questions the membership of this local might have.

It is unfortunate that a climate of uncertainty tends to bring out rumours and misinformation at many of the worksites. In order to put the record straight, as many questions and concerns as possible will be addressed in this newsletter. It is the opinion of the leadership of Local 598 that open communication with the membership is really the only way to head off the destructive effects of the worksite rumour mills and of the misinformation that is so often present in the media.

First, there seems to be a story circulating that this union is doing nothing to deal with the issues that may result from the merger. This is simply untrue. The Bargaining Committee has been very active in formulating plans to cover every contingency that might occur once this deal has been completed. We will be prepared for every foreseeable eventuality that might come up. It is important to know that we will not be able to do anything until after January 27th. We have issued a number of newsletters since the original announcement was made and have increased our presence in the local and national media, both electronic and print. We have addressed any questions presented by the members at the general membership meetings, kept our website up to date and issued email and news articles to those members who have provided an email address for inclusion on the mailing list. We will continue to provide any information that we are able as quickly as possible to our members.

At the worksites, we are asking you to not spread rumours. Many may sound plausible and may be attributed to individuals on staff. Be aware that supervisors or members of the OCT will be not more knowledgeable than anyone else in a situation such as this. Legally, Inco management cannot discuss the details of this merger with Falconbridge or its Unions. They have not given their own unions any information that we have not received. In other words, no one out there is any better informed than we are, but there are a lot of people speculating about what might happen and are discussing it like it is fact.

If you happen to find something in the media that seems to run counter to what the Union is saying, remember that reporters are not experts in mining, finance, or labour law. They repeat what they are told in interviews and someone with even less knowledge about the facts will often edit what they report. There have already been instances where the stories reported in the media have not fit the facts.

If you have questions or feel that you have been told something that needs clarification, ask your chief steward, or contact the hall by email or telephone. We will get you the answers or clarify the situation.

What Has Been Done & What Will Be Done?

On October 28th, several members of the committee traveled to Toronto to meet with a number of our Staff Reps. for advice at the CAW National offices. Among those that we had talks with were: Lewis Gottheil, Legal Director; Hemi Mitic, Assistant to the President; and Joanne Hannah, from Pensions and Benefits. We spent a good deal of time discussing the merger and its implications, are continuing to receive support and feedback from the National. Buzz Hargrove has committed both staff and financial resources from the National offices to deal with any issues that may emerge as a result of this deal.

Further, we have researched what our position would be with regard to the merger, and forwarded that information to Jim Stanford, the Union’s economist. He has taken this document, and added to it and this will be published in booklet form. Once received, we  will insure that a copy will be mailed to your home address.

After the sale of the Company has gone through, (and that is by no means guaranteed as yet), there are a number of scenarios that might occur regarding your Union representation. First, the new Inco may decide it prefers to operation with two contracts and two business units. We have studied the implications of that scenario and have plans in place to deal with what could happen under that option. If they decide to merge resources, manpower, and equipment that would violate the scope clause in our collective agreement and as a result that could trigger a representation campaign under the “Sale of Business” clause, (section 68) of the Ontario Labour Relations Act. After January 27th, if the deal goes through we will continue to monitor the situation very closely. Until that time we will continue to study the options and any possible actions that could be taken by any of the parties involved. Should a representation campaign be initiated after the merger, only the active membership of the Production and Maintenance Units of Inco and Falconbridge would be eligible to vote.

We have studied the merits of both collective agreements and other issues that might come into play but at this point in time it would be inappropriate to comment on these issues officially. We are aware that the Steelworkers are involved in similar research and that they will not be commenting officially at this time either.

For the time being you may rest assured that your Union is working to insure that your rights and benefits will be protected under the law and that your pension is secure.

The following sources of information are available to you:

  1. The Website : http://www.minemill598.com/

2.      The Frontline Flyer: The committee will attempt to deliver this newsletter on a bimonthly basis to your worksite.

  1. Email and Internet updates: If you want to get on this list send an email to info598@minemill598.com and provide your name and worksite.

  2. General Membership Meetings : Held on the second Wednesday of the month at 7:30 p.m. at the Hall and at 1:30 p.m. on the second Thursday of the month.

  3. Your Chief Stewards : Rej Berthiaume, Jack McGrath, Jeff Mullally, Gord Lamothe, Richard Paquin, and Brian Castilloux.

  4. Full Time Leadership: Rick Grylls, President and Bob Beck, Unit Chair-Falconbridge.

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Check out this link:

Interesting arguments are made about what merger mania in the mining industry really means, from an Australian perspective which parallel some of our arguments about the Inco/Falconbridge merger.

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December 08, 2005

Thoughts on the Merger

There are some politicians and labour leaders in this community who need to take off their rose coloured glasses and see the merger between Inco and Falconbridge for what it is in the cold light of day. They need to look beyond the image of having the largest nickel company in the world headquartered in Canada. They need to stop thinking that this is a made in Canada solution that will somehow be good for the local economy.

Mining is a global business. Corporate management thinks in terms of global operations and global markets. They will go wherever it makes economic sense for them to go. They will do whatever it makes economic sense for them to do. If we think that some sort of sentimental attachment to Sudbury will prevent the closure of one operation, or the loss of one job we would be mistaken.

There is no doubt that there will be an upside to this merger in the short to medium term, but before we jump onto the bandwagon we must investigate all of the implications of this deal, both the positives, but most importantly, the negatives, because that is where the impact will be most significant in its long term impact on the local economy and job market.

For example, in the October 11 merger announcement, management spoke glowingly in terms of synergies that would allow the mines to increase production and of cost savings such as could be realized by using the Strathcona and Clarabelle mills more efficiently, especially with regard to transportation costs. Both sounded good and everyone applauded these moves. In the euphoria of the moment no one considered those workers whose livelihood depends upon the transportation of ore to the milling sites. There are a number of other possible downsides over the long to medium term that could affect the economic security of people who depend upon the resources of the Sudbury Basin for their economic well-being. We cannot be blind to the downside. We must be educated about what may happen and be prepared for any eventuality. A counter bid by Xstrata for one or both of the local operations is not the only bogeyman here, we need to be watchful of Inco and Falconbridge management as well as any of the other major international global mining giants who may decide to make a play to enter the nickel business. Above all, organized labour must be clear that the agenda they must advance is the agenda of working men and women, their families and the communities in which they make their homes.

Bob Beck,

Unit Chair-Falconbridge

Mine Mill/CAW – Local 598

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