Tell Freeport Mining Executives $2.70/hr is NOT "very generous".
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Tell Freeport Mining Executives that $7.50/hr is NOT “Excessive”;
Not here or in Indonesia.
To: James R. Moffett
Chairman of the Board
Richard C. Adkerson
Chief Executive Officer
Freeport-McMoRan Copper & Gold (FCX) FCX is a leading international mining company. They operate the world's 2nd largest copper mine in the Gasberg reserves in Papua, Indonesia where approximately 8,000 hourly union workers are cable to processing nearly 230,000 tons of ore a day.
They are head-quartered in Phoenix, Arizona where, incidentally, Arizona's state minimum wage is currently $7.35/hour.
In Freeport-McMoran's 2010 Annual Report :
“In 2011, we will focus on executing our plans for
future growth in response to the global market demand
for metals while continuing to emphasize safety,
aggressive cost management and social responsibility.
These commitments are central to our core values
and a primary driver of our corporate social
They put aggressive cost management and social responsibility in the same sentence which could have something to due with the fact that beginning on September 15, 2011 the Labor Union representing those nearly 8000 workers went on strike just prior to their bi-annual Collective Labor Agreement which was up for renewal on September 30th. In a press release from the Freeport-McMoran said that “there is no legal basis for the strike under Indonesian law.” Since when does their have to be a basis for people to strike when they have a grievance... did those participating in the Boston Tea Party act on a legal basis?
The striking union workers were demanding a pay increase to $7.50/hour which was deemed “excessive” by Freeport-McMoran's chief executive Richard Adkerson as the workers currently earn only about $2.00 an hour compared to their American counterparts who averaged $23.01/hr back in 2008 according to the U.S. Department of Labor. Adkerson said the union's demands “have been excessive by an extraordinary amount”. He continued “We are proposing a very generous increase of 35 percent over two years but they are asking for multiples of that.”
Now most of us would jump at a 35% pay raise, but keep in mind the long exhausting hours and work that these miners do... and then consider they are at $2.00/hour... as a caring human being it is not important that it is in Indonesia vs the United States (the ore coming out of the the ground is similar) and it is still only $2.00/hour.
Now let's add that generous 35% that the company is coming to the table with --70 cents? (35% sure sounds like more.) Freeport-McMoran is being generous by now paying their 8,000 labor force $2.70/hour? But not right away... remember, the union workers will get to that $2.70 over the next two years? It is understandable why the union is striking; after all in the 2010 Annual Report Freeport-McMoran said:
“Our outstanding financial results during 2010 allowed
us to further strengthen our financial position, enhance
our liquidity position, advance our attractive development
projects and provide increased cash returns to
shareholders. We repaid $1.6 billion in debt in 2010, and
our Board of Directors increased our quarterly common
stock dividend over 200 percent during the year. We also
paid a supplemental common stock dividend of $1.00
per share (pre-split) in December 2010, and our positive
share price performance and outlook for our business
enabled our Board to authorize a two-for-one stock split,
which took effect on February 1, 2011.”
At a time when a lot of companies are downsizing, stagnating, or even going out of business Freeport-McMoran managed to increase their quarterly common stock dividend by over 200% during the year. That was not accomplished solely by the executives in the Phoenix office though, but by their workforce... and now they are going to thank some of those workers with a gradual raise to $2.70/hr over the next two years?
The real problem is that the copper and gold that Freeport-McMoran is galloping out of the ground is finite; that is to say the open pit mining operation is due to be depleted of ore by 2016. Now they are working on development and infrastructure of underground mining in the area, but that too will eventually run out. What then? After paying Indonesian workers a parsley amount to depleting their own natural resources so those resources can then be delivered to the rest of the world in an effort to earn shareholder's a better dividend... what then? Does Freeport-McMoran make like the famed Once-ler from Dr. Suess' The Lorax and pull up stakes leaving Papua, Indonesia in environmental and financial ruin? Or do they pay their workers an actual decent wage which will hopefully provide them with a nest egg so that once they are gone the laid off workers can reforest, rebuild, and have enough money to move their life on to something better like their own business or possible educational endeavors.
Quit being greedy, and meet the miners request were they are at...in the hole you dug them, then lift them out to $7.50/hr. Which is only “excessive” if you think 15 cents over Arizona's minimum wage is “excessive”.
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