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

  • Sales, profit at Sears in U.S. continue to decline

    Economic CTV News
    HOFFMAN ESTATES, Ill. -- Sears, the one-time standard bearer for U.S. retail, has posted quarterly losses for more than a year now, and sales continue to slide as the company shutters poorly performing stores. The company's cash situation, which has led in the past to clashes with suppliers, is an ongoing concern. Source
  • Stock markets in New York hit new record highs

    Economic CBC News
    Major stock markets in New York closed at record highs Thursday amid a broad rally from banks, materials and technology companies. The Dow Jones industrial average advanced 65.19 points at 19,614.81, while the S&P 500 added 4.84 points at 2,246.19, both hitting all-time highs for a second day in a row. Source
  • BlackBerry launches new security platform to help companies manage connectivity

    Economic CTV News
    WATERLOO, Ont. - BlackBerry revealed its latest security offering on Thursday intended to help companies reliably manage their current and future connectivity needs. The company's new platform, BlackBerry Secure, is designed to help businesses keep tabs on all their devices to transmit sensitive data to keep people, information and goods safe. Source
  • NHL won't change name of Vegas Golden Knights despite trademark denial

    Economic CBC News
    The National Hockey League says it won't change the name or logo of its newest club, despite being denied a trademark by U.S. authorities. Just a couple of weeks after the Vegas Golden Knights revealed their name, logo and team colours, the U.S. Source
  • Coke sets sights on new demographic: foodies

    Economic CTV News
    NEW YORK -- What beverage goes best with lobster rolls, a bagel sandwich stuffed with whitefish, or a bowl of ramen? Coke wants you to think of soda. Coca-Cola is trying to sell more of its flagship beverage by suggesting the cola can accompany a wide range of meals, rather than just the fast food and pizza with which it's a mainstay. Source
  • Overhead bin fees? Yes, with United's new 'basic' fare

    Economic CTV News
    United Airlines is creating some turbulence in the airline industry with changes to its fare structure, including a new “basic economy” fare. The cheap ticket comes with a catch, however: If you want to use the overhead bin, you must pay an extra charge. Source
  • SNC-Lavalin cutting 405 jobs in Canada mainly due to mining weakness

    Economic CBC News
    Engineering giant SNC-Lavalin is cutting another 405 jobs in Canada due to the weakness in the mining sector and ongoing efforts to boost its profit margin. Spokesman Louis-Antoine Paquin says the company will eliminate 186 positions in Montreal, 195 in Ontario and 24 in Saskatoon, says spokesman Louis-Antoine Paquin. Source
  • Public sector workers paid 10.6% more than private sector average: Fraser Institute

    Economic CBC News
    Almost 90 per cent of public sector workers have some sort of pension plan. By constrast, less than a quarter of private sector workers do. (Chris Wattie/Reuters) People who work in the public sector make almost 11 per cent more than their counterparts in the private sector, a new analysis of Statistics Canada data by the Fraser Institute think tank has found. Source
  • Toronto, Hamilton, K-W expected to lead country in 2017 house price gains: Re/Max

    Economic CBC News
    Re/Max sees the average national house price rising by two per cent in 2017, led by big projected gains in real estate prices in the Hamilton, the Greater Toronto Area and Kitchener-Waterloo. In its 2017 housing market outlook, which was released Thursday, Re/Max said it sees house price appreciation in Hamilton leading the country with an 11 per cent gain in average residential home sale prices, followed by eight per cent gains expected for both the GTA and K-W. Source
  • Number of new home construction projects dips in November: CMHC

    Economic CTV News
    OTTAWA - The federal housing agency says the number of new home construction projects dipped slightly last month. Canada Mortgage and Housing Corp. says the seasonally adjusted annual rate of housing starts in all areas of the country fell to 183,989 units in November, down four per cent from 192,297 units in October. Source