Itís sad to look across a vacant parking lot that not long ago had the cars of 240+ employees in it. Heclaís ďPower GrabĒ has forced the employees to choose to strike rather than ratifying a contract thatís made up of mostly concessions that address control, not so much economics. This strike had to be expected by Hecla (HL), for if they truly believed it would be welcomed with open arms, Iím afraid their arrogance and egos have swelled their heads to the point of them not seeing what was obviously apparent. Letís think about what has occurred: The mining crews break a 16 year record for silver production in 2016, and they are rewarded with a concessionary contract offer, which leads them to vote to strike and then HL says they are disappointed? Really? I donít believe for a second that management was surprised, and neither should the shareholders. The saddest thing is that HL says they are prepared to wait out the union. Letís put that into perspective: HL is prepared to starve out the employees who contribute to the companyís success performing one of the most dangerous jobs in the country. On the heels of HL reporting a $69 million dollar profit for 2016, they are forcing through implementation, cuts for the hourly employees at the Lucky Friday. What a wonderful way to acknowledge your employeeís hard work!
HLís repeated position on the contract is that the mine canít survive into the future without the sweeping cuts they propose and the use of a new mining method. So thatís in the future, but how far into the future? The new mining method and machinery they want are years away from final engineering, fabrication, delivery and then most importantly; to be proven to be a safe mining method for the miners, cost-worthy for the mineís orebody and a smart investment for the shareholders. So my feeling is to worry about the future when it gets here, not now. Negotiate a 3 or 4 year contract that reflects what we do right now then re-address your new mining method needs down the road. Donít lock us into a 6 year contract thatís built for something thatís not even on the property yet.
One of the biggest disagreements concerning the proposed contract offer is the current job bidding system in place. Itís been used for years at the mine and is what gave the Lucky Friday/HL 3.6 million ounces last year, but that too is a program they want complete control of. By having the ability break apart mining teams who have been together for years, not only will it reduce production, it will take even more money out of the minerís pockets. Also with the new Silver Price Premium matrix they have implemented, it gives them the control to cap ore production just under the tonnage thatís need for the program to pay out to the employees. So we could work our tails off to reach the goal, only to have the company cut us off just under the required tonnage goal. They get their tonnage, we get nothing. The Profit Sharing plan currently in place will go away also. The company pockets a $69 million dollar profit, but we donít share in their good fortune while the CEOís pay gets increased to over $6 million dollars/year, up from over $4 million. Hecla loves to preach ďTeamworkĒ, but the coach seems to be what itís all about.
USW Local 5114 didnít want to open the contract for negotiation this year. We hadnít planned to ask for anything. Hecla requested it be opened so they could throw their list of concessions on the table and havenít moved on them much since. Do the right thing HL and come to the negotiating table and actually do what the word ďnegotiateĒ means. Itís been said many times before by both sides, but itís worth repeating: We are some of the best deep narrow vein miners in the world, we want to work, and we want to see the Lucky Friday Mine prosper. The new technology you talk about will be welcomed just as the diesel equipment was welcomed when it replaced the slushers and raises back in the 80ís. But as HL said repeatedly themselves; thatís in the future, not right now. The price of silver is going up and youíre missing the boat. Shareholders, including myself, donít appreciate the fact that you are holding a producing property hostage so you can make a power move, not so much an economic move. Using the production figures from last year, this strike has taken over $6 million of cash flow (not including lead and zinc values) out of the companyís budget so far and itís only at day 33. Thatís not good for the company, the shareholders or the employees.
Remember: A Miner will work his tail off to put money in his pocket, but not so much if all the money is going into somebody elseís. When a Miner is making money, the company is making money.
Paul Sala, 25 year Lucky Friday employee and proud member of USW 5114.