BY CRAIG GILBERT
Inco Ltd.Â?s hourly employees will be getting a bonus of about $2,000, thanks to second quarter earnings, according to spokesperson Cory McPhee.
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IncoÂ?s second quarter earnings of $156 million is more than double the $67 million it made over the same period in 2003.
Inco reports its earnings in American dollars.
The company took a loss of $14 million in the period, which had the effect of nullifying the membershipÂ?s nickel price bonus.
But Â?plan B,Â? as United Steelworkers of America Local 6500 president John Fera calls it, allowed for the bonus.
Â?Those are the kinds of things weÂ?ve been negotiating over the past several years instead of substantial pay increases,Â? he said Thursday.
The earnings-based bonus provides a link between the health and success of the company and its employees, McPhee said.
Â?This time around, as a result of our earnings - and this is based all on what we do here in the Ontario operations - the hourly rate employees will be receiving an extra $3.90 for every hour worked in the quarter,Â? said McPhee.
Staff employees, by contrast, will receive 15.6 per cent of their quarterly salaries.
Â?The idea with both is the same: they see that by contributing to the overall success of the company on the job, they can influence their own take-home pay,Â? he said. Â?ItÂ?s much more relevant than, say, the price of nickel or the overall results of the company because there are things there that are out of their control.
Â?By tying the bonuses directly to Ontario results, it gives them a chance to influence what we do.Â?
The union leadership Â?buys into that,Â? said Fera.
Â?If the companyÂ?s profitable, weÂ?re profitable,Â? he said. Â?We buy into that, but we think the company could be a lot more profitable (through certain means). We try to talk to them about it, but theyÂ?re management and they run it.
Â?It amazes us that at $7 (per pound) nickel, this company could write down for a loss. I donÂ?t know how that happens, but IÂ?m not an accountant.Â?
In announcing the results, Inco CEO Scott Hand stressed world demand for nickel will exceed supply in 2004.
That means Â?very strongÂ? cash generation, he said, adding each 10 cent hike in the price of nickel represents about $43 million for the company.
At the end of June, the companyÂ?s cash balance was $774 million; cash revenues for the company may exceed $1.2 billion for the year.
