How Comalco broke the unions at the Bluff smelter

- Pete Lusk


The British mining giant Rio Tinto* owns Comalco, which, in turn, is the biggest owner of New Zealand Aluminium Smelters Ltd, which operates the Tiwai Point aluminium smelter, near Bluff. It is very familiar to Watchdog readers. As an aside, it’s worth reflecting, during this cruel winter of freezing temperatures, soaring power prices and low water levels in the hydro lakes, that Comalco’s Tiwai Point smelter is guaranteed an uninterrupted supply of between 15-20% of all New Zealand’s total electricity output, at a very cheap and very secret price.

The below article is from the February 2000 issue of Metal, the magazine of the NZ Engineering, Printing and Manufacturing Union. It is reproduced with permission. Adelia Hallett, Metal editor and Engineers Union media officer, notes: "Since the story was written, our industrial laws have changed and the union is starting to develop a relationship with management at Tiwai Point". Ed.

"A company document obtained by the Engineers Union shows how NZ Aluminium Smelters (NZAS) successfully hatched and carried out over five years a plan to sideline and all but destroy unions at the Tiwai Point smelter. It contains tips on how a similar plan could be executed in Australia. The campaign worked by undermining the credibility of unions on the site and by making people who signed individual contracts feel valued. Tactics included inviting them to beer and cheese evenings and giving them free tea, coffee and biscuits. The report's authors say that two ‘external factors’ – the passing of the (former) Employment Contracts Act and the downturn of the Southland economy – helped the company enormously. The offer of individual contracts was timed to coincide with the closure of the Ocean Beach freezing works at Bluff and the announcement, in July 1991, that poor aluminium prices would force the smelter to lay people off. Within two months, 80% of the workforce signed the individual contracts. Two months later the union's site convenor signed an individual contract, and, according to notes from the diary of the smelter's general manager, the unions ‘rapidly collapsed’. The offer of individual contracts was set against a background of a carefully orchestrated campaign, which began in 1986 with the restructuring of the workforce. This included doing away with the positions of superintendent and chargehands, moving the operations managers from the administration building to a position near the smelter itself and the decentralisation of the maintenance work group, which was seen to be the strength behind the unions. In 1987 the site convenor, who had given strong leadership to the unions, was given voluntary redundancy. In 1988 the company gave salaried staff pay increases that were twice as large as that given to wage workers. Up until then, the workers' rise had been flowed on to salaried staff. The change weakened the strength of the unions in the eyes of the members.

"The unions were further undermined by some industrial losses, including the acceptance of clawbacks, the introduction of compulsory respirator wearing without an extra allowance to cover it and the loss of some mediation cases. At the same time, the company moved to improve its relationship with the workforce. Historically, the only means of communication between bosses and workers had been through union delegates and the Southland Times newspaper. Bosses began appearing on the shop floor, different uniforms for different ranks of employees were replaced by a single site uniform with names instead of laundry numbers on them and wage workers were no longer ordered to clean the bosses’ cars. By 1991, when the Employment Contracts Act had been in place less than a year, the company was ready to move. According to the general manager's diary notes, he sent every worker covered by the collective contract a letter offering individual contracts on the (superior) staff conditions. A second letter explaining the need for redundancies was also sent. The unions were not involved. ‘During the first eight months of 1991,’ the diary notes read, ‘the union was bypassed as a deliberate plan to become closer to the workforce and not work through delegates as in the past’.

"Workers who signed individual contracts were given special treatment, such as being invited with their wives to beer and cheese evenings. The report says that one of the keys to destroying the unions' influence at the smelter was painting the company as caring for its waged workers.

Make The Workers Forget Why The Union Needed To Exist In The First Place

"Salaried staff were no longer given preferential parking, members of the volunteer fire brigade were paid for their out-of-hours training, the company paid for financial counselling for people struggling to make ends meet after overtime was removed and wives were consulted about the effects changed shift patterns would have on families. Health and safety issues were made a priority. The past practice of the unions in accepting allowances for unsafe work was used against them. ‘Use housekeeping and safety as the initial thrust,’ the report said in its recommendations to Australian unions. ‘These improvements demonstrate caring for the workforce and make it difficult for the union to resist and oppose change’. But the most significant change was that the workers' thoughts about the smelter operation itself were listened to. They felt part of the operation and valued. ‘The ability for the workforce to utilise their capability has been the fundamental factor in cementing the change,’ the report says. The authors warn managers against slipping back into old autocratic practices or of ignoring their workforce's feelings. In the past the unions had acted as welfare agents. Management was seen as not being interested in personal issues. ‘What happens currently and in the near future is of critical importance,’ the report says. ‘A new implicit or explicit system must be established to show that management does care. The behaviour now being shown by those who have accepted individual contracts is indicative that (there is) a void which has to be filled. There is much reference to what the union used to do and who will now do it…One of the concerns…is that an absence of response could easily lead to a forceful reminder of why a union needs to exist’.

"*Rio Tinto owns more than 60 mines in 40 countries, including New Zealand, Australia, South America, North America, Europe and Africa. It employs 51,000 people, has assets of more than $23 billion. It has been trying to de-unionise operations all over the world. The international union campaign against the company's plans can be seen on the Internet at".

Pete Lusk comments:

Company Baited Its Trap With Beer And Cheese

The above review is a pretty good summary of the NZAS papers, but there is one extra point that needs to be made. The Engineers Union (EU) was the biggest at the smelter and it is one of this country's most collaborative. So the drive of the EU over the last couple of decades for 'partnership with the employers' to make NZ business 'internationally competitive' played into the company's hands when it wanted to form a partnership with its own workforce and shut out the union! Key to the NZAS success were:

1. Putting the frighteners on the workers by referring to low aluminium prices, failed strikes in Australia, and large layoffs at Southland freezing works (the hostile climate created by the Employment Contracts Act also helped).

2. Bringing in a new style manager who made a point of touring the plant, chatting to the workers and personally dealing with their concerns.

3. Showing itself to be "trustworthy" and "caring". What it promised, it delivered. At the same time the unions were less and less able to deliver.

One thing which is not mentioned in the papers, but is the motivation behind the whole project, is what the company gives to the workers is far outweighed by what is taken away. A classic is the beer and cheese evenings - the all-up annual cost would be in the thousands of dollars. But by breaking the union NZAS managed to layoff 190 workers, get rid of almost all overtime, insulate itself from pay hikes and expensive strikes, get the workers to give freely of their knowledge to improve the production process and multi-skilled everyone. Imagine the tens of millions gained here!

While the NZAS report gives the impression that everyone is a ‘winner’, the deceitful nature of the project is revealed in a paragraph about transferability to Hammersley Iron in Australia. "The ability of Management to create an impression of a business which is threatened whilst it is still making good profits is certainly difficult," note the authors.

"Loving", "Courage": Company Doublespeak

Those driving the project measured progress by how workers perceived things at the smelter. At the start, workers saw the union as looking after them and management "out to get them". This is tabulated under the heading "Loving". The union "will fight management" while management won’t deal with the problems raised by workers (Heading: "Courage"). After the cultural change, workers saw management "trying to keep us in jobs" and the union "deserting" them ("Loving"). Management have got rid of "bad elements" and now have the right workforce, while the union has "just melted away" ("Courage"). Here we get a glimpse of the science behind modern union busting.

Studying NZAS/Comalco over the last 30+ years has given us a lot of valuable insights. They are corporate front runners in exerting political pressure on governments (ultra-cheap power contract), greenwashing to improve its image (such as the Save the Kakapo campaign), and now its sophisticated plan to break the unions and transfer the technique to its plants around the world.

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Foreign Control Watchdog, P O Box 2258, Christchurch, New Zealand/Aotearoa. August 2001.


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