The Brazilian business of Vale SA (ADR)(NYSE:VALE) is going through a turbulent time. According to reports, workers at company’s Timbopeba iron mine went on strike to show their protest against the non-payment of a profit sharing bonus.
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The commodity market in Brazil is facing a difficult time as the prices of metal prices have declined to a record level. This unpredicted plunge in the metal prices has forced the company not to pay workers their due bonus for the year 2015. It’s the first time in recent history when Vale has failed to pay the bonus to its workers, prompting them to protest against company’s decision.
The situation doesn’t seem to improve in the near future as the unions are planning to call for a strike across the country. While talking to reporters, Valerio Vieira, Director – Local Miners Union, said that this initiative would motivate other union representatives to take the same step. Vale has decided not to pay bonuses for the entire year, and a nation-wide strike can force it to change its decision. Unions will try and take this protest to all new heights, forcing the company to reconsider its decision to cut bonuses for the previous year.
It’s not the first time when a company has decided to cut back the wages of workers to reduce the impact of global slowdown. Many companies around the world have done it in the past. The global downturn that started in China in 2015 affected USA, Europe as well as many economies from Asia. Brazil wasn’t an exception to this economy collapse. The national government has already announced many initiatives to help companies fight this turbulent time; nothing seems to work well at this moment.
Reporters tried to get in touch with any of the Vale representatives, but nobody could be contacted. It will be great to see how it handles this situation and convince workers to return back to work.