Wabush Mines

Culture change  April Terreri talks with the vice president of Wabush Mines to learn more about his vision of inclusion among unionized and salaried employees.  Up until about a year ago, going to work at Wabush Mines in Labrador was not a very pleasant experience. The relationship between union and salaried workers had long been tense and distrustful. But all that is changing since Gino Levesque took over as vice president and general manager of Wabush a little over a year ago. ÔÇ£WeÔÇÖre trying to find ways to turn the business around by changing the culture so we can usher in new momentum to be more flexible and more competitive in the market,ÔÇØ says Levesque. Wabush mines iron ore and then processes it into concentrates in its extensive facilities. It then transports the concentrate by rail on its company-owned and -managed Arnaud Railway to Sept-├Äles in Quebec, where the concentrate is manufactured into pellets. Wabush has the capacity to produce 6 million metric tons (tonnes) of iron ore pellets annually. Levesque reports that the companyÔÇÖs annual revenues are $500 million and that Wabush employs about 800 people. One of the striking characteristics of the employees Levesque noticed when he took the helm was the tense and troubled relationship between union and salaried workers. He recognized that reconciling this situation should be the first area of focus, and he set to work with enthusiasm and diligence. ÔÇ£For the last year, we have been working on having more open communication between the two parties and more transparency,ÔÇØ he explains. ÔÇ£This meant that managers would spend time being on the floor with workers. We also wanted to make sure that every one of our employees understood what our company vision is going forward, because you really canÔÇÖt change the culture and bring people together if they donÔÇÖt know that the reason they need to get along better is so the company can continue to prosper and be competitive.ÔÇØ To bring about the culture change, Levesque realized he needed to establish a sense of urgency to make employees understand that change was required or the company could face ongoing trouble. Once this sense of urgency was established, he was able to implement new key performance indicators (KPIs) and improve communication between all parties. ÔÇ£I pointed out to them that the company was operating under a high cost structure, and that this required bold moves so we could all achieve a common goal,ÔÇØ he says. One of the points of the new philosophy Levesque made certain to drive home was that he didnÔÇÖt expect everyone to always be in agreement with any issue under discussion. ÔÇ£If someone disagrees, we want them to feel free to state that and to also explain why they disagree. Because if youÔÇÖre not sharing with others the reason why you disagree, weÔÇÖre stuck in a difficult communication mode,ÔÇØ he says. And the lack of communication between the parties was one of the major obstacles to progress. Levesque reports that initial reactions to this new open communications approach were positive. ÔÇ£The employees found it interesting to have access to people who have an influence on them and the future of the company. Although they like this approach, it works for a short period of time before they want to see some results relative to the new conversation that was going on.ÔÇØ It was difficult at first, admits Levesque, because at the time he took the helm the international economic downturn had just begun to take hold. ÔÇ£This meant we had to make some very tough decisions initially that involved slowing down our operations and laying off people. We had several meetings at which we shared with salaried and union workers why we were making these tough decisionsÔÇöand we were willing to be challenged by them. Of course, the decisions were not popular with them at the time. But one year later theyÔÇÖre beginning to believe in what weÔÇÖre trying to do for the company, because they see that weÔÇÖre delivering in line with what we were telling them a year ago.ÔÇØ Part of that delivery involved rehiring about 95 percent of the people laid off last year. This decision was a major factor in beginning to instill trust. ÔÇ£ItÔÇÖs very difficult to build a relationship of trust, which is very fragile,ÔÇØ reports Levesque. ÔÇ£But today that relationship is stronger than it was just a year ago.ÔÇØ He recognized how imperative it was to have every employeeÔÇöthe journeymen, mechanical and electrical personnel, operators and managersÔÇöunderstand that each employee has an important role to play within the organization. In addition to training programs for managers, Wabush has instituted new KPIs so that every employee knows where the company is and where it needs to be. Levesque notes that the company beat the budget for 12 consecutive months already. ÔÇ£We reward our people when we beat production and cost numbers relative to the KPIsÔÇöeven if we struggled through a tough year,ÔÇØ he says. ÔÇ£So all these initiatives together help us demonstrate to our people that weÔÇÖre delivering the results.ÔÇØ Levesque assures that employees know the impact of their contributions so they know their decisions are also important to the progress of the company. Another situation facing Levesque early in his tenure was dealing with renegotiating the union contract. ÔÇ£During that time, we were at the end of the union labor agreement and were beginning negotiations. I realized there were many things that needed to be improved, and if we were all going to be able to work together to change the confrontational mode to one of collaboration, I needed to use the negotiations as an opportunity to help everyone understand the reasons we had been inefficient, and how important it was for everyone to bring new ideas to the table that could improve our business approach. I recognized that we needed to be open with the union demands while trying to produce a win-win deal that could result when people realized we were not taking advantage of the tough times. We finally have an agreement with the union, after 10 months of negotiations, which will give me more tools to improve the efficiency of the company. The unionized employees feel they got a good deal from the company, and this is probably our best asset for the coming years.ÔÇØ Of the companyÔÇÖs 800 employees, about 650 are unionized. With a strong and united workforce to back it now, Wabush is engaged in developing an additional customer base in North America and overseas, pursuing new opportunities in China, Europe and Japan. It is also busy working on innovative ways to leverage its extensive holdings, such as its railway and material handling equipment at the Port of Sept-├Äles. For instance, the company just signed a contract with Consolidated ThompsonÔÇöa new mining company in northern QuebecÔÇöto transport 8 million tonnes of that companyÔÇÖs concentrate on WabushÔÇÖs Arnaud Railway to the port. ÔÇ£WeÔÇÖre also working with other companies to develop business to handle their railway transportation to the port, where we will prepare their ocean shipments using our material handling equipment.ÔÇØ The future looks bright for the company, says Levesque. ÔÇ£We plan to operate this mine right into 2030. A capital investment project worth $40 million will allow that to happen because weÔÇÖll be able to utilize more of the iron ore in the mine by reducing the manganese with the new manganese-reduction equipment weÔÇÖre installing that will help extend the life of the mine.ÔÇØ