by Peter Carter (CPA Magazine – June 1, 2017)
It was a February Friday in 2007. Jennifer Maki was given a choice. At the time, Maki was assistant treasurer at Vale Canada, a subsidiary of the biggest iron-ore mining company in the world, Rio de Janeiro-based Vale. Like lots of Vale’s senior positions, Maki’s duties were moving to head office in Brazil. The question was: would she rather take an 18-month buyout package or stay with Vale in Toronto in a yet-to-be-determined position?
The buyout looked appealing. In the months leading up to Vale’s offer, Maki’s world had gone through seismic shifts, and in the process, friends, colleagues and fellow executives either left or were asked to leave the company. There was little doubt she would find other work.
Her rise to the senior ranks of the company had been meteoric, beginning in 2003. After 10 years as a CA with PricewaterhouseCoopers in Toronto, Maki had accepted an offer from the client whose file she had been auditing for nine of those years, giant nickel miner Inco.
A few years later, Inco found itself the object of worldwide attention during a protracted and dramatic takeover battle that climaxed in August 2006, when a surprise bid for the publicly traded Inco was announced by Brazil’s Vale (pronounced vah-lay). The deal ultimately cost the Brazilians about US$17 billion.
The purchase rocked the industry. Suddenly, the very profitable 100-year-old nickel giant was off the stock market and out of Canadian hands. Vale imported a new corporate culture and Canadians who had worked for Inco were viewing their new bosses with suspicion and fear. Morale sank.
Retired Vale smelter worker Chris Palmaro, 60, of Sudbury, Ont., worked 30 years for Inco, then Vale. The difference was “night and day,” he says. “Why do you think I retired early? We figured Vale would be taking profits off the backs of Canadians and spending them on their South American operations.”
What’s worse, Vale’s iron-ore operations were in debt; the price of nickel and iron ore was starting to decline and Vale Canada’s future was uncertain. There was some talk of splitting it off in an IPO, an idea Vale eventually decided against. On the other hand, Maki was only 35.
She had been at Inco and Vale through some of the most exciting times in the history of Canadian mining. “It was 2005 when Inco made the bid for Falconbridge [its chief competitor in Sudbury] and from that time to the following August, when Vale made its bid, there couldn’t have been a more exciting period to be involved. I remember you’d wake up and be the business news of the day. Most people don’t get that in a lifetime,” she says.
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