Wednesday, August 20, 2008

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.

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