SNC-Lavalin Group is mired in a lengthy strike with unionized engineers and scientists at its Candu Energy unit that is raising concerns about a brain drain at the company and its ability to provide service to Canada’s nuclear-power operators.
The battle is part of the restructuring at the Candu division of former Atomic Energy of Canada Ltd., which SNC purchased from Ottawa for $15-million last year. The federal government had grown frustrated by AECL’s constant cost overruns which were backstopped by taxpayers, and SNC made it clear it intended to force more commercial discipline on the former Crown corporation.
The Montreal-based engineering giant has already pulled the plug on any ambition by Candu Energy to design next-generation reactors to replace the existing Candu 6 design, but is instead modernizing that aging workhorse.
And now, like many private-sector companies, SNC has insisted – and the union has agreed – that employees give up their defined-benefit pension plans and accept a defined-contribution plan, a move that would provide a savings account rather than a monthly cheque in retirement.
“That was something important for the long-term viability of the business,” said Patrick Lamarre, president of the nuclear division at SNC.
Mr. Lamarre played down the impact of the strike which started on June 4. But officials at the 850-strong Society of Professional Engineers and Associates (SPEA) say dozens of their members have already taken jobs elsewhere, and many more have offers that they are considering from Candu Energy’s customers and competitors.
The “anecdotal evidence” of the loss of senior engineers and scientists worries Candu customers like Duncan Hawthorne, chief executive officer at Bruce Power which is restarting two reactors after a lengthy and much-delayed refurbishment.
“There definitely has to be some level of concern” about the labour dispute, Mr Hawthorne said in an interview Wednesday. “These people are the heart and soul of the Candu design, and to the extent some of that is lost, it could hurt the industry.”
The country’s nuclear power stations don’t depend on Candu Energy for routine operations and maintenance, but Mr. Hawthorne says its expertise can be critical for specific problems or in a major retooling. A spokesman at Ontario Power Generation – which owns nuclear stations at Pickering and Darlington – said its operations are unaffected by the strike.
SPEA vice-president Mike Ivanco, who works as a scientist at Candu Energy, said SNC-Lavalin let go about 100 people after formally taking over in October, but then had to hire most of them back. Since then, some 70 senior engineers and scientists have left, he said.
But Mr. Lamarre said the company has more employees now than it did last October, and blamed any turnover on normal attrition and a competitive market for skilled workers.
“We want this to be successful and we’re very happy to have the leading role that we now have for the Canadian nuclear industry,” Mr. Lamarre said. “Everything we do is to make sure this nuclear industry and this Candu technology – as well as growth for SNC-Lavalin as the shareholder – keeps growing for the next 100 years.”
Despite union claims to the contrary, Mr. Lamarre insisted that all Candu Energy contracts are moving forward, including its proposal to build Enhanced Candu 6 reactors at Darlington, where it is competing with Westinghouse. The companies must submit their proposals by next summer.
He acknowledged that the company’s nuclear unit will be under the microscope with the arrival of new chief executive officer Robert Card, slated to take over in October from Pierre Duhaime, who resigned amid a series of scandals. Mr. Card has a mandate from the board to do a complete review of SNC’s businesses.
“Like all the divisions, we’ll have to demonstrate our business case, we’ll have to demonstrate our track record and we’ll have to look at our prospects and how we’ve been able to execute,” he said.