The weak demand and prices that prompted Rio Tinto’s titanium subsidiary to abandon a $4-billion expansion is now threatening hundreds of jobs at its Quebec plant.
After meeting with company officials, the union representing workers at Rio Tinto Iron and Titanium said it fears between 230 and 400 jobs are at risk.
“The union finds it unjustified the cuts being demanded of the iron and titanium plant at Sorel-Tracy,” says union president Jacques Boissonneau.
Even during past recessions in 1982-83 and the early 1990s there was never a push to cut so many positions, the union said.
Sam Walsh, the new CEO of Rio Tinto, is pushing to cut $5-billion of costs over the next two years.
While Mr. Boissonneau acknowledges weakening market and economic conditions, he said the parent company’s motivation is to offset $14-billion of writeoffs taken last year, largely related to the Alcan acquisition.
“There are lots of families that are worried, along with the workers,” Mr. Boissonneau said in an interview.
The union believes about 75 positions will be eliminated by September and another 155 a year later.
It adds that other positions could be eliminated because of the company’s desire to obtain subcontracting clauses during contract talks currently underway.
Offsetting any potential job losses are about 137 employees eligible for retirement or early retirement, he said.
The Rio Tinto unit said it needs to cut costs but won’t confirm the union’s speculation.
“As we speak, the scenarios are under study, there are no confirmed numbers,” spokeswoman Claudine Gagnon said.
“We know we have to reduce our costs … and we know that we have to adapt and be flexible.”
The Sorel-Tracy plant in Quebec has 1,800 workers, including 1,350 unionized employees with two unions.
Rio Tinto’s iron and titanium subsidiary abandoned plans in February to build a plant in Bécancour, Que., that would have created up to 400 jobs.
Managing director Jean-François Turgeon has said it abandoned the expansion because the company needed to reduce costs amid weaker market conditions.
The company said in February it was still going ahead with a five-year $800-million Quebec project that was announced in 2011 to extend the life of the Lac Tio mine until 2050 and modernize the Sorel-Tracy metallurgical complex.
The subsidiary of the London-based miner produces titanium dioxide feedstocks, high purity iron, steel and metal powders.