Magma Copper Company

BACKGROUND:

Magma Copper Company was facing extreme challenges due to increased competition, deflated prices, restrictive environmental regulations, along with many other factors. Hostile relationships between management and labor unions exacerbated these problems.

THE CHALLENGE:

Faced with these challenges, union and management leaders at Magma began a concerted effort to rebuild their relationship in the service of a future in which all would share. At the same time, it had become clear that nothing would change significantly in the work environment until the workforce became involved. Faced with an urgent need to increase productivity despite a history of hostility and distrust, company leaders sought to shift the fundamental relationship between managers and employees, from a climate of cynicism to one of partnership, collaboration and shared interest in a common goal.

THE APPROACH:

Magma hired Vanto Group to work with both management and labor teams to overcome this history of hostility and distrust, and to build an entirely new culture throughout the organization. Vanto Group worked with a cross-functional team of 140 selected individuals to develop a strategic focus for the company. The group created a vision of the company’s future, formulated strategic goals to realize that vision, and launched a cross-functional initiative to involve employees in implementing the goals. Nearly 4,000 of Magma’s 5,000 employees, including management, union officials, and employees from across the organization, voluntarily participated in this program.

BUSINESS OUTCOME:

The Vanto Group and Magma partnership was instrumental in realizing major accomplishments in key strategic areas. Productivity was increased by 86%. Production costs were decreased by 40%. Safety rates improved to award-winning levels. Absenteeism and grievances were substantially reduced. Magma’s stock increased dramatically.

Vanto Group also worked with Magma’s Tintaya mine, which Magma acquired from the Peruvian government. With the support of Vanto Group, the Peruvian workers were able to transform the culture of the formerly state-owned mine, which had been characterized by under-performance, hierarchical structures, and poor union-management relationships. Production rose from an average of 10 million pounds to 140 million pounds in one year. The traditional one-year Peruvian labor contract, which had previously taken six months to negotiate, was replaced by an unprecedented five-year contract that was negotiated in just three months.