Rio Tinto freezes non-union salaries in anticipation of tough 2016

MONTREAL -- Mining giant Rio Tinto has frozen the salaries of its global non-unionized workforce, including many in Canada, as it prepares to weather an expected tough year.

See Full Article

In a note to employees, CEO Sam Walsh said cost-cutting efforts over the last three years have not been enough to offset falling metal prices and the "very sobering" outlook for 2016.

"From the CEO down, we are implementing a salary freeze for 2016," he said.

"This decision was a very difficult one. I'm sure you are disappointed by it, as am I, but it is necessary given the market context."

It marks the first wage freeze in more than a decade for Rio Tinto's global aluminum division, which is based in Montreal.

The company's Canadian operations, which also include non-aluminum operations, have a total of about 12,000 employees. The number of non-unionized workers was not available.

Although bonuses will continue, Rio Tinto is also limiting travel by making better use of technology.

Walsh said the global economy remains sluggish as China's economic growth has fallen and demand has shifted from metals-intensive sectors like infrastructure and construction to consumer spending.

China accounts for as much as 40 to 50 per cent of global commodity demand, according to consultants PwC. Its economic growth is forecast to drop below seven per cent a year from double digits in recent years and commodity prices are tracking it lower.

Commodities prices are around the 2005 levels or lower. Rio Tinto has been particularly hit by the dramatic drop in iron ore prices, its largest commodity.

The price of copper has dropped about 30 per cent in the past year and gold 11 per cent, while the price of iron ore has about halved. Many companies have responded by cutting costs and reducing capital spending.

Anglo American announced last month that it was shedding 85,000 employees or more than 60 per cent of its workforce and reassessing its huge operations to cope.

Walsh warned that the pressure won't let up.

"This situation is not temporary and our industry is now moving into the new normal, which means we must continue to be one step ahead."

With files from The Associated Press



Advertisements

Latest Economic News

  • Early cannabis sales 'unbelievably high' after legalization: feds' U.S. consultant

    Economic CTV News
    OTTAWA -- A U.S. consultant hired by Ottawa to assess Canada's eventual recreational pot market says jurisdictions that regulate cannabis should expect "unbelievably high" sales growth in the first few years as criminals are driven out of business. Source
  • Yo ho ho! Pennsylvania aims to smash U.S. embargo on Cuban rum

    Economic CTV News
    HARRISBURG, Pa. -- Pennsylvania's Cuban rum run got its start in a chance meeting last fall in the parking lot in front of the state capitol. "'You know, we have rum,"' a visiting Cuban government liaison told state Sen. Source
  • Is this the future of college: Online classes, but no degree

    Economic CTV News
    WASHINGTON -- Connor Mitchell's university classes take place online, he doesn't have any exams and he studies in a different country every year. Is he looking into the future or taking a gamble? With college costs rising steadily and with more courses available online for free, some observers are beginning to question the need for a traditional college education that may include lectures on Greek philosophy but burden students with massive debt. Source
  • New York City pitches to Canadian tourists amid 'Trump slump'

    Economic CTV News
    TORONTO -- New York's tourism industry is worried U.S. President Donald Trump's "America First" policies are turning off Canadian visitors, and they're heading north this week to woo Canucks and their tourism dollars. The head of New York City's official tourism organization, NYC & Company, minces no words in admitting he's keen "to counter a little bit of the negative rhetoric that is coming out of Washington. Source
  • Iconic Dad's chocolate chip cookies discontinued, customers bitter

    Economic CBC News
    For months, some Canadians have been searching in vain for their beloved Dad's chocolate chip cookies. A current Facebook thread on the topic is full of tales about quests for the item. Source
  • U.S. economy expanded at weakest pace in 3 years in first quarter of 2017

    Economic CTV News
    WASHINGTON -- The U.S. economy turned in the weakest performance in three years in the January-March quarter as consumers sharply slowed their spending. The result fell far short of President Donald Trump's ambitious growth targets and underscores the challenges of accelerating economic expansion. Source
  • Montreal landlord fined after tenants rent out condo illegally

    Economic CTV News
    A Montreal landlord says he’s been fined more than $1,200 because the tenant living in his condo listed the space on Airbnb without his knowledge. Gerry Galiatsatos said his unit came with tenants when he purchased it less than a year ago. Source
  • Swedish cows in a great moooo-d as summer pastures open

    Economic CTV News
    DROTTNINGHOLM, Sweden -- Despite a cold wind and chilling temperatures, spring has come to Sweden. At least, spring for the milk cows. In an annual event that warms hearts across the country, "koslapp" -- the cow release -- has become a popular family outing for urban residents. Source
  • Trump to spend Day 100 in office talking trade

    Economic CTV News
    WASHINGTON -- U.S. President Donald Trump is marking his 100th day in office by talking tough on trade.Trump's first 100: Day-by-day highlights Analysis: We've read all President Trump's tweets, so you don't have to The White House says the president will sign an executive order Saturday that will direct his Commerce Department and the U.S. Source
  • Trump says he's brought 'profound change' to Washington

    Economic CTV News
    WASHINGTON -- U.S. President Donald Trump on Saturday marked his 100th day in office by saying he had brought "profound change" to Washington and reaffirming that "my only allegiance" is to those he governs.Trump's first 100: Day-by-day highlights Analysis: We've read all President Trump's tweets, so you don't have to During an evening trip to Pennsylvania, one of the states that propelled his unlikely election victory, Trump planned to sign an executive order directing the Commerce Department…