Michael Sloopka's Press Regarding Potash Corporation Labour Dispute

Negotiating Expert Weighs In on Serious Potash Corporation Labour Dispute

Michael E. Sloopka, a Guelph, Ontario-based expert in negotiating and decision-making, says that the recent impasse in the discussions between Potash Corporation of Saskatchewan and United Steelworkers Union is very unfortunate and is a failure of the negotiating process and for those attempting to manage the process.

There are millions of dollars at stake for shareholders, management, and employees in this outcome. There are a complex series of issues at play in this negotiation – from the personality types involved in the negotiations, commodity prices, fertility management programs, crop yield capitalization, management stock option programs – to competitive Potash mines being developed in Russia.

There is no doubt that some shareholders and senior management have made millions of dollars from the performance of Potash Corporation’s stock price in recent years. Sloopka says that it is inevitable that employees want their “share” of this success; however, he warns that employees need to be careful about the idea of entitlement and expectations. Sloopka says that employees, like any investor, could have reaped the benefit of Potash’s stock price performance by investing in the company’s stock.

Sloopka says that the concept of “performance-based” incentives and bonuses for employees is a good strategy, and perhaps this approach makes more sense than the “commodity-based bonuses” that the Steelworkers and its members are pursuing. Sloopka says he hopes that the employees do not put themselves into a similar position to that of the North American autoworkers by achieving short-term gains in negotiations that are difficult to maintain and sustain in the long term.

Sloopka says he is seeing more and more parties becoming involved in impasses and deadlocks, because both sides do not have realistic opening negotiating positions in the early stage of negotiations. If both side’s opening negotiating positions are not realistic, reasonable, and attainable, Sloopka says that negotiations can break down quickly as a result of momentum not being attained from the expected “give and take” by both sides that is necessary for a mutually beneficial Win-Win outcome.

Sloopka says that getting to the “walk-away” stage in any negotiation and a having a “take-it-or-leave-it” attitude is the easy part – especially when both sides know that mediation and arbitration are potentially available to them. Gambits and countergambits such as “bracketing” and “spitting the difference” are common approaches used by mediators and arbitrators, which is why Sloopka is not fond of this result from a failed negotiation attempt.

Sloopka says that Potash’s competitor Agrium’s recent negotiation with the Egyptian government over a buyout of Agrium’s stake in a fertilizer manufacturing plant was a good example of a more collaborative approach to negotiating. It was clear that both sides could have taken a more aggressive stance on that situation; however, both sides realized that a Win-Win outcome was achievable with the right attitude, approach, and process.

Sloopka says that even if a negotiation is very complex and complicated, people need to utilize the proper process, methodology, strategies, and techniques in order to arrive at a satisfactory outcome. Sloopka encourages all his clients to understand that there are three stages to every negotiation: establishing opening positions (based on a maximum plausible position), gathering and exchanging relevant information with the other side, and, finally, reaching for compromise.

The current hard-line posturing by Potash and the Steelworkers Union is not conducive to arriving at a satisfactory outcome. Sloopka says that both parties should continue negotiating, consider changing negotiating team members, or bring in outside experts to help with the process – before it goes to mediation or arbitration – which, Sloopka says, ends up being a Win-Lose situation.

Investor's Daily Magazine - Sloopka Intervew

Dear Friends, Colleagues, and Clients:

Please see an article that recently appeared in the Investor's Daily Magazine and online edition. There are a some good tips in this article for business people and consumers.

Have a great week,

Michael E. Sloopka
The Negotiating Coach


Check Your Emotions In Vendor Negotiations

Yahoo! News and Investor’s Business Daily Magazine – August 8, 2008

By: Morey Stettner

As your company grows, you'll spend more time and money dealing with vendors and suppliers. Negotiate favorable terms by keeping your emotions in check.

"Once you reach a verbal agreement, beware of getting so excited that you overlook the details," warned Michael E. Sloopka, president of negotiatingcoach.com, a training and consulting firm in Reno, Nev. "It's not enough to say that you'll work things out later."

Sloopka advises entrepreneurs to address ambiguities and tie down loose ends before completing the negotiation. If you brush aside issues for later, you may dig yourself into a hole.

For example, define delivery dates with precision. Instead of verbally agreeing to "prompt delivery," clarify the time frame. If you want the vendor to commit to three-day delivery, do you prefer business days or calendar days?

Three Smart Steps

After you finalize terms with vendors, they might ask you to sign their contract. But the advantage goes to the party that drafts the agreement, Sloopka says, so beat them to the punch. It's better if you originate the contract. That way, you can protect your interests and ensure that you understand every clause.

From the outset, let vendors know that you will draft the supply agreement for them to sign. That eliminates surprises down the line and signals to them that you will be paying attention to detail. Whether shopping for raw materials or finished goods, begin the process by asking for a proposal from a supplier. Then use it as a starting point 15 haggle over the terms.

"When you've finished negotiating, draft a document based on what you've both agreed to," Sloopka said.

Because of similarities in most transactions, Sloopka suggests establishing a boilerplate vendor contract that your attorney reviews and approves. Then for each deal, tweak it on your own until it fits your legal requirements.

That saves you from paying lawyer fees each time.

Savvy Negotiation Ploys

During the dickering stage, look for chances to secure terms that give you maximum flexibility. For example, strive to work within wide parameters that fit your changing needs.

Rather than commit to purchasing 80,000 units of a vendor's product, for instance, propose a range of buying 60,000 to 80,000 for the same price. If your business hits a rough patch, you won't be forced to overbuy at a time when you want to scale back.

To wring concessions from vendors, use questions rather than statements.

Sloopka coaches entrepreneurs to begin with the words, "Under what circumstances ... "

Instead of declaring to a vendor, "You better not sell this to our competitors," it's wiser to ask, "Under what circumstances would you sell this to us exclusively?"

"Most people are too confrontational," Sloopka said. "If you start by arguing, it intensifies others' desire to prove they are right."

You can reach Michael E. Sloopka at michael@sloopka.com or call him directly at 1-888-581-6777, or visit his website at http://www.negotitingcoach.com