Wednesday, February 3, 2010

Rio Tinto (NYSE:RTP) Locks Out Union Workers

Rio Tinto

Rio Tinto (NYSE:RTP) locked out union workers who unfortunately listened to their union bosses and didn't accept a good contract offer which included a 2 percent raise in salary during a recession, an 80-percent healthcare coverage deal and a $4,000 bonus.

Why did they reject it contract? Incredibly, they thought they should be rewarded with promotions based on how many years they were at the company rather than how good they did their jobs. What do they think they are? Politicians?

Whenever unions pressure their people to reject contracts like this, you know they've settled into what they consider tenure and thinking someone owes them.

Rio Tinto also wanted to hire more nonunion workers, another reason for rejecting the contract by International Longshore and Warehouse Union Local 30.

In response, replacement workers were hired to keep the mine operating. Deputies wearing riot gear were deployed to keep any violence from erupting. Three busloads of replacement workers arrived at the scene.

An extraordinary weak argument was offered by the union concerning the contract, saying it would allow cronyism to emerge concerning who would get promotions.

A bizarre conclusion when the union system of using who works there the longest, regardless of quality of work, should get the promotions; something proven to be one of the more wrongheaded practices which causes discouragement to good workers, who are held back because of the idea of entitlement from those who think because they've worked there a long time they no longer have to produce.

Anyway, promotion based upon seniority is the ultimate cronyism, where the practice of favoritism is systemic, rather than based on the quality of the work offered by the individual.

The mine under consideration is a borax mine, which has lost 25 percent of market share with the commodity.

Rio said they need to stay competitive, seeming to mean they have to have workers who will perform and not think they can work as they want to based on hanging around longer than someone else.

It sounds like this is the end of negotiations and more replacement workers will be hired going forward.

Rio Tinto

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