Saskatchewan Wheat Pool says the 200 job cuts it announced last week
are an extension of its elevator consolidation program and not the
result of the drought.
“We, more than a year ago, constructed a new business model that really
took us to what would be an end state,” chief executive officer Mayo
Schmidt said in an interview after the Sept. 17 announcement.
“This substantially completes the changes that we needed to make. This
was planned.”
Schmidt said the restructuring reflects a change in the ratio of
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managers to employees. Forty percent of the eliminated jobs were at the
Regina head office and 15 percent were management.
Neal Hardy, a Hudson Bay farmer and president of the Saskatchewan
Association of Rural Municipalities, said the closures leave farmers
with few alternatives and extra costs.
“Any time you take away a delivery point, it hurts farmers.”
Once Hudson Bay stops accepting grain Nov. 17, the average haul will be
about 120 kilometres to Tisdale or more than 160 km south to Canora, he
said.
“It does away with any of the small truck hauling,” Hardy said. “I’ve
got only 780 acres seeded this year. I won’t have semi-loads of
anything.”
Sask Pool expects to save about $5 million in fiscal 2003, and $12
million annually in the future. It has eliminated about 900 jobs in the
last two years.
Schmidt said the drought has accelerated the closure of seven wooden
elevators and 20 local service outlets.
He declined to say which elevators would close.
However, the Grain Services Union said wooden elevators will be closed
or converted to local service outlets in Gravelbourg, Hudson Bay,
Leask, Maidstone and Rockhaven.
The union also said outlets will be closed in Landis, Lipton, Rabbit
Lake, Spiritwood, St. Walburg, Theodore, Tribune, Leader, Biggar, Birch
Hills, Blaine Lake, Fiske, Floral, Glaslyn, Rose Valley, Cabri and
Delisle.
As well, the Moose Jaw communication centre, which opened in 1998 to
ensure customer access to pool products and information, will be shut
down.
Employees are also being laid off at the Alberta AgPro facilities.
GSU general secretary Hugh Wagner said those cuts are short sighted.
“We question the logic of that,” he said. “These are large inland
terminals.”
The pool will re-open two facilities in southwestern Saskatchewan that
were closed due to last year’s drought. Schmidt declined to name them.
He said once the latest cuts take effect Jan. 15, 2003, the company
will have about 1,850 employees. Only 300 people will work at head
office.
“We’re going to see more of this in the industry,” Schmidt said. “These
companies that would intend to continue to support a work force twice
the size of our work force have extra people and extra costs and that’s
not sustainable going forward for them.”
David Schroeder of Dominion Bond Rating Service called last week’s move
“appropriate.”
“There are some pretty unusual market circumstances right now,” he
said. “When volumes do come back they should be pretty well
positioned.”
The pool’s share price dropped below $1 in the days after the
announcement, closing at 80 cents on Sept. 20 before rebounding to 90
cents on Sept 23.
Wagner suggested the pool’s health “could cause it to fall into the
hands of an outside buyer.”
But Schmidt also said the pool purchased drought insurance, and that
will help the company pull through.
Pool spokesperson Dawn Blaus confirmed Monday that the company will
move its government relations office out of Ottawa to Winnipeg as early
as next week.
Vice president of commercial relations Richard Wansbutter will assume
responsibility for government relations.
Some Western Producer employees are members of the GSU but are in a
different local bargaining unit than SWP employees.
