New Caledonian nickel producer to phase out 20% of jobs
Updated
New Caledonia's largest nickel producer has announced plans to radically cut costs over the next three years. Management at SLN say they were taken by surprise by the intensity of the global financial crisis... and are now working to ensure they won't be caught out again in future. But unions representing SLN workers are already objecting to plans to phase out one in every five jobs at the plant.
Presenter: Helene Hofman
Speakers: Pierre Alla, the chief executive officer of SLN; Didier Guenant-Jeanson, secretary general of Trade Union of Workers and Employers of New Caledonia better known as USOEC
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It's just a year since SLN reported profits of 873 million US dollars. However, times have turned and a fall off in demand for minerals has hit the world's fifth largest nickel producer badly. SLN management say they operated at a loss for several months of this year - and they've now announced a series of cost-cutting measures aimed at saving nearly half a billion US dollars a year over the next three years. It'll involve making production more efficient to cut down on energy consumption, and tightening up on maintenance spending. Most controversially, though, SLN wants to phase out about 500 jobs - a fifth of its total workforce - once they are vacated by retirees.
Pierre Alla, the chief executive officer of SLN, says they've been left with little choice.
He points out that:
- Company has been impacted by financial crisis and falling demand and needs to adjust their production costs accordingly
- Aim to sustain the next crisis. This one will be fine but there will be another downturn
- Expecting some opposition from unions about the phasing out of jobs, and currently discussing it with them
- Mining industry has been hit worldwide. Ore is poorer quality than before and there is new competition from low-cost operating countries like Indonesia and the Philippines.
However, as New Caledonia's biggest private sector employee, SLN's planned job cuts are already causing a stir. The trade unions representing its workers says it's completely against the move. Union leaders say the decision is further proof that the SLN is acting solely in the interests of its parent company Eramet in France and are demanding justification for the restructuring. New Caledonia has a 30 per cent stake in SLN, and the unions have met with the presidents of the three provinces in a bid to garner their support. Didier Guenant-Jeanson (Dee-dyay Guh-nawh Zhon-sown) is secretary general of the French territory's largest trade union - the Trade Union of Workers and Employers of New Caledonia or USOEC. He says the unions will do everything in their power to fight the phase-out of jobs... unless the company shows it's serious about its future involvement in New Caledonia.
The SLN has always been a money pump for Eramet. That is to say the money is sent back to Paris and it completely slips away from New Caledonia. Historically, the SLN does nothing but fuel the group in Paris and so today this company finds itself in New Caledonia and it must participate more in New Caledonia's community. We want to fully take stock of what's happening with the company, and once we've done this we can then work together with the minority shareholder - that is the three provinces of New Caledonia - and the shareholder in Paris and the trade unions and set out a plan for restructuring that would take into account the interests of all three parties.
