Job layoffs cause stir in Esterhazy

Kristine
Kristine MacDougall
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Grenfell - Layoff notices in the potash industry caused a bit of a stir in the media last week.
Potash and fertilizer producer Mosaic Co., issued the notices to 1,000 workers on January 8th, 2009 in two locations. 300 people will temporarily loose their job at the Colonsay operation while 700 people will be laid off in Esterhazy. According Esterhazy Miner Journal reporter, Helen Solmes, the news reports are not only inaccurate, but are causing some concern among local businesses and people.
"It's already starting to have an impact on consumer confidence," she said. "(The layoffs) are the company's way of regulating their inventory. And they have the logistics of stockpiling."
Media reports stated that the layoffs were all indefinite, which Solmes says is inaccurate. In fact, employees were notified on January 8th, 2009 of a two week layoff, which, says Solmes, is a common practice in the potash industry, so there's really no cause for alarm.
A layoff at the Esterhazy operation at this time of year usually signifies that China, one of the biggest buyers of potash in the world hasn't signed any new contracts yet. Solmes noted that the last layoff at Mosaic Esterhazy was in 2006, and was also a result of China signing new contracts late. In that situation, there were four weeks of layoffs spread over a few months - one week in February, one in March, one week in April and the last week in May 2006.
Solmes also pointed to another reason for the false alarm in Esterhazy.
"Part of the misunderstanding, something that the media didn't pick up on, is that Potash Corp and Mosaic Colonsay, have wording in their contracts that requires much longer notification of a layoff, just like Mosaic Esterhazy," explained Solmes. "All three have different unions, which means that Mosaic Colonsay and Potash Corp, find it expedient for them to lay off temporarily, indefinitely so that they don't have to be repeatedly giving this long notice," she said adding that things at the Esterhazy operation were a little different.
"Whereas in Esterhazy, under the Esterhazy contract, they have to give one week's notice for each week of layoff roughly. So they have that kind of flexibility."
Last week, the Sask Potash Council held it's inaugural meeting and raised some concerns regarding the state of business with the three major potash producers in Saskatchewan. One particular concern was the number of layoffs throughout the province in the potash industry.
"The cost per tone to produce potash has remained relatively stagnant while these companies continue to demand a higher price per tone from their customers," said Darrin Kruger, Secretary/Treasurer of the Sask Potash Council.
"The perception that there is a surplus of potash on the market at this time is only exaggerated because of the refusal of these mining companies to lower the price of their product," he said through a media release earlier in the week.
Kruger added. "Perhaps it's time we asked these companies to justify laying off Saskatchewan workers while they continue to pay their corporate executives exorbitant sums of money."
However, for Solmes and many people involved or directly affected by the potash industry, news of layoffs is just a fact of life.

Organizations: Mosaic Co., Potash Council, Mosaic Colonsay and Potash

Geographic location: Esterhazy, Colonsay, China Saskatchewan

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