On the Supply Side radar is the battle that is going on between the BHP Billiton Mitsubishi Alliance and various unions.
At the heart of that dispute is BMA’s wish to run its operations as it sees fit. It wants the flexibility to set up its rosters as it needs to and to be able to employ contractors as necessary.
Over in the west there is a view that this is just crazy. Of course a miner should be able to manage its operations as it sees fit – providing it does so within the laws.
There have been a couple of examples, one quite recent and one almost 30 years old that show what happens when management takes drastic action to break union control.
The western viewpoint comes from a very similar stoush that completely changed the way mining operations in Western Australia’s Pilbara were run.
It was 1986. Halleys Comet swang by, Mike Tyson became the youngest heavyweight champion ever, David Boon was resplendent in baggy green and bushy moustache, Whitney Houston found the greatest love of all and the Bangles were walking like Egyptians.
It also was the year that Charles Copeman started work at Robe River Iron Ore.
This was the operation that sent US iron ore giant Cleveland Cliffs packing from Australia.
Most in mining have heard the stories about the union misdeeds there. Same flavour of icecream two days in a row. Everybody out. One carton of milk in the smoko supplies at the marine humpy instead of two. Everybody out. If only one person is needed for a job the whole crew draws full pay regardless. If not … everybody out.
These days there is a lot of effort put into catering on mine sites. Back then, the food was so good and plentiful, Wickham locals talk of the piggery just outside town where the pigs were fed on the mess hall scraps.
Robe River was the fourth largest iron ore producer in the world back then but it was an unprofitable operation.
Copeman, an Oxford university graduate who attended the university at the same time as erstwhile Australian prime minister Bob Hawke, walked into this environment. On July 31 1986 he began the job of bringing Robe into line.
Out went 284 restrictive work practices.
Out went several senior managers who Copeman felt had become too entrenched in the Robe culture.
Shop stewards were required to work at regular jobs and would only be given time to attend to union matters when their supervisors deemed it appropriate.
When the WA Industrial Relations Commission weighed in with an order that Robe maintain the “status quo”, Copeman decided this was too hard to obey. He dismissed the 1180 award workers at the operation and lodged an appeal against the order.
This sent a shockwave through Australia.
Robe operations were silent until September 2 when production restarted.
Within two months, the 1180 had fallen by 520.
The operations were to weather some industrial relations storms over the next few months but those strikes actually did the union’s cause more harm than good.
Robe discovered that 250 people employed on production were capable of achieving almost three quarters as much as 850 people normally employed on such work.
Things settled down and productivity improved.
Sadly, Copeman never got to enjoy that productivity. He was bundled out as North took over the operation and never worked in an executive capacity in the resources sector again.
A more recent example of management striking back was the recent Qantas dispute when chief executive Alan Joyce grounded the airline’s planes.
That move effectively headed off a lot of the industrial problems the airline was facing.
Whether this will be the case with the BMA dispute remains to be seen.
Its Norwich Park mine has been closed with the company claiming costs were too high for it to remain viable. A change to the industrial agreements on that site may lead to a rethink on that.
Of course there is the view that the unions are going hell for leather at the moment to try and get as many enterprise agreements in place as they can because they sense a change in the wind.
Prime Minister Julia Gillard seems to be stumbling from one disaster to the next.
A change of government at the next election could well lead to a change in Australia’s industrial relations framework and hopefully undo some of the damage that has been done.
This article first appeared in ILN's sister publication MiningNews.net.