Posted by Sudbury Northern Life
Last month I wrote about the hollowing out of northern
Ontario and the continuing deterioration of authority,
influence and relevance in key sectors.
The topic of the day was the destruction of CBC Radio as a
connecting force in the North and the ignorance of the people
who made the decision to save such piddling amounts of money in
the shadow of such benefit.
This month another storyline.
Vale Inco is restructuring. They are taking people in the
finance, human resources and procurement departments and moving
the strategic thinking and execution out of Sudbury and down to
São Paulo and Toronto. In simple terms, it means that local
procurement (say rock bolts) will remain in Sudbury, but
worldwide purchasing (say tires and information technology)
will be done elsewhere. It means that the analysis of the
business will move from Sudbury to São Paulo.
It is no secret that important decisions are not made in
Sudbury anymore about the international operations of Inco, or
for that matter, the local operations of Inco. But when you
start moving human resource people, you are reducing the
Sudbury operation to the level of a dumb terminal. Mark
Cutifani, a past president of the Ontario division,
notwithstanding his regular commute to Toronto, ran the world
from Sudbury. It was an exciting time for Inco Sudbury
operations. Those days will never return.
It's important to understand Vale Inco isn't doing anything but
rationalizing its operations and cutting costs in a recession.
I don't like it, but the current owners are just doing their
job.
They are doing what you do when you buy something. You make it
fit your business. If Inco had been a buyer instead of a
seller, three years ago, we'd be consolidating jobs in Sudbury,
not São Paulo. We did this to ourselves.
Look to the failed previous Inco management and the sycophantic
federal and provincial governments if you are looking for
scapegoats. And forget those silly commitments Tony Clement is
talking about. They don't matter. They are a joke and have
nothing to do with creating wealth. I've always wondered why
they bothered with any of these things anyway. It gives the
false impression that selling out isn't selling out.
Vale Inco is doing nothing different than The Sudbury Star. If
you want to talk to a real person in accounting, classifieds or
production you need another area code.
So what's left? Our mining supply sector is what is left. It is
the only heartbeat in a wasteland of managers with nominal
responsibility and no authority. If you want to know what to do
for economic development, just follow the money. The money is
where decisions are made.
How do you get to make decisions? You have to own something. We
no longer own much of anything. I won't depress you with the
litany of rationalizations, sell offs, closures and cutbacks.
What matters is to save the local ownership of the mining
supply sector at all costs. If we let that go, we will have
nothing left. Most of the people that own these businesses are
older than 50. They are going to sell. The City of Greater
Sudbury needs to fund a massive effort to keep ownership local.
That means succession planning to ensure these companies pass
from their current founders to their bright young daughters and
sons or the enthusiastic managers of these companies or another
local owner who has no intention of moving the thinking
somewhere else.
This is the most critical cost effective economic development
investment that can be made. I've tried to sell this idea to
the last three mayors of this city, all of whom understand the
importance of it, but none of whom did anything about it.
As Vale Inco drifts away, as small retail concerns continue to
shrink in the shade of big box stores, as national media
companies centralize everything in Toronto, and as governments
retrench, there are really only two viable strategies for
Sudbury's sustainability. The supply sector and education. The
rest is window dressing.
The time is now. It's not that complicated. It just takes the
guts to make it happen.
Michael Atkins is president of Northern Life. His column
also appears monthly in Northern Ontario Business.