PotashCorp owners should share the pain of cuts, Wall says
Company cutting 1,045 jobs - nearly half in Saskatchewan
Saskatchewan Premier Brad Wall wants the leaders of PotashCorp to rethink the company's dividend policy and try to save jobs.
On Tuesday the Saskatoon-based mining company announced permanent layoffs of 1,045 employees — about 18 per cent of its overall workforce — with 440 of the jobs cut affecting workers in Saskatchewan, at mines and its head office.
Company CEO Bill Doyle noted that PotashCorp's dividend policy would not change, calling the payments to shareholders "sacrosanct".
On Thursday Wall said that view causes him concern.
"You know what? Mr. Doyle has his shareholders, I have mine," Wall told reporters at the legislature in Regina. "They're the people of the province who, by the way, own the potash in the first place."
Wall also penned a letter to the company, on Wednesday, outlining his concerns. The province released the letter Thursday.
"In difficult moments like this," Wall wrote, "it is important that everyone shares in the sacrifice. Mr. Doyle's comments suggest that this did not happen."
Wall repeated that observation Thursday.
"All the shareholders in the company should share in the down times, not just workers, not just subcontractors, but shareholders," Wall said.
On Thursday afternoon, PotashCorp published its response letter to Wall, explaining that the company feels it is important to provide shareholders with a return on their investment.
The company also noted that even if the dividend policy was reduced "to zero" the layoffs would still be necessary to ensure the long-term sustainability of the business.
"The numbers of employees who will be impacted [by the layoff] is not connected in any way to the amount of the company's dividend," the letter, signed by Dallas Howe, the chair of the board, said.
Howe's letter also said the company's dividend is "not sacrosanct" adding that cash to shareholders is evaluated against the company's other priorities.
He said the shareholders have also seen the value of Potash Corp stock fall in recent months, affecting their holdings.
"This depreciation in share value is a real and material sacrifice," Howe said. "Our shareholders clearly have shared the pain even if we have not added to that pain by also denying them their dividends."
With files from The Canadian Press