Turnaround depends on global demand, Wabush Mines tells workers

(CBC)

A Labrador iron ore mining company that plans to lay off more than a third of its workforce says a comeback will largely depend on how quickly the global financial crisis is resolved.

Wabush Mines employees reported for work Wednesday unsure of how massive layoffs announced Tuesday would affect them.

The company said it will need to cut production next year to about half of current production levels, with layoffs of about 130 unionized employees and 30 non-unionized workers. Wabush Mines made the decision amid a sharp decline in global demand for steel.

Vice-president Gino Levesque said the company, though, is hoping to soften the blow to its workers.

"Of course, if we have an opportunity to give a chance to some people to take their retirement, we'll do it, in order to save younger people or have less people affected by that," Levesque said.

The United Steelworkers union was distributing information Friday to its workers on the company's plans.

Layoffs are expected in February, and the union expects to learn more later this week on the details of how layoffs will be rolled out.

Levesque said when and how things return to normal at Wabush Mines — the smaller of two iron ore mines in western Labrador — will depend on world markets.

"If the situation turns really, really quickly, of course we'll try to minimize that," he said.

"We don't expect that very soon, in terms of turnaround, but we hope that it could happen in 2009."

Last week, the Iron Ore Co. of Canada also said it will be cutting production at its mine, in neighbouring Labrador City. IOC said, however, that it has no plans for now to lay off any of its employees. Instead, it will schedule a month-long work stoppage next summer, when many employees are on vacation.