Inco Lockout Forces Company to Leave Contracts Unfulfilled

A protracted labor dispute at nickel mining giant Inco Ltd.'s operations in northern Manitoba is preventing the company from meeting customers' orders.

Because of the ongoing lockout at its mine and mill in Thompson, the company said it cannot continue to supply all of its customers with specialized high-grade nickel from the Manitoba division.

As a result, Inco said it would declare force majeure -- a standard contract clause that excuses the company from fulfilling its obligations due to extraordinary unforeseen events -- with several clients.

Inco's 1,050 unionized workers in Thompson have been out of work since Sept. 15, when the company locked its doors and shut the Manitoba operation down in the face of an 86 per cent rejection of its ''final'' offer.
Company spokesman Jerry Rogers said Wednesday that the decision may cause the Thompson dispute to drag out longer.

''When there was the prospect of the force majeure, we sincerely wanted to reach a settlement out in Thompson,'' he said. ''But now the force majeure has been declared, it takes some pressure off the bargaining process.''

This action reflects Inco's ''inability to continue to supply such products under those contracts until such time as production at the Manitoba Division is restarted,'' the company said in a release.

Inco sells through five specialized marketing units throughout the world, Rogers said. ''It will be a staggered force majeure; not everybody will do it immediately and it depends on their supply chain and contracts.''

The high-quality nickel Inco produces at Thompson goes to the plating industry and ends up in car bumpers, sink faucets and household appliances.

The company sells about 50 million pounds of this nickel each month, with the Thompson complex supplying 7.5 million pounds or 15 per cent.

Inco originally sought wage and benefit reductions at Thompson, but its last offer was a wage freeze with a profit-sharing plan. The Steelworkers union is seeking a six-per-cent pay increase over three years.

Inco supplies about 26 per cent of the world's nickel, and the Thompson mine alone supplies nearly five per cent of the global market.