28/01/09

Five out of seven mineworkers unions in Brazil`s Minas Gerais and Mato Grosso do Sul states have accepted iron ore producer Vale`s (NYSE: RIO) offer to give workers paid leave with reduced salaries instead of laying them off, according to a company spokesperson.

“These unions said they are willing to negotiate,” the spokesperson told BNamericas. “And a sixth union in Carajás, in northern state Pará, voluntarily phoned us asking to sign the offer.”

Unions in Minas Gerais represent a total of 19,000 workers.

In the proposal, Vale said it would retain jobs through May 31 for all unionized workers who accepted the offer.

“The objective is to allow Vale to gain a bit more time to reorganize the production of its mines in order to adjust to new market realities,” the company said last week.

Vale offered to pay 50% of each worker`s salary and to guarantee a minimum monthly wage of 856 reais (US$369). The company also offered to retain all benefits such as health and life insurance, supplemental retirement plans and meal plans.

In reference to the offer, the head of the Metabase union of Belo Horizonte, Sebastião Alves de Oliveira, said in an interview that he felt it is better for workers to give up some of their rights than to relinquish their employment altogether.

Meanwhile, Nilson Rocha, president of the Minas Gerais industrial technicians union (Sintec), said miners in that state did not have much of a choice but to accept the offer.

“We are a bit apprehensive but this proposal could be the only way to save jobs,” he said.Claudio MendonçaBusiness News Americas

BN Americas