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Lecture

ADMS 1010 Lecture Notes - Capital Expenditure, Stainless Steel, Xstrata


Department
Administrative Studies
Course Code
ADMS 1010
Professor
Rebecca Jubis

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Inco (International Nickel Company of Canada)
Henry Wingate held Inco’s top position. Later took over by Grubb.
Economic crisis results of sales, profit, market- share . Poor labour relations
led to strike.
The strike caused reduced deliveries and earnings, worked hardships on
customers, and delayed construction work.
After Second World War, the company achieved the largest production of
nickel and earnings were
The increasing demand of nickel is because of 1) European reconstruction
required more nickel, 2) the discovery of expanded uses for nickel, including
stainless steel, 3) Japanese demands for military purpose, and for the cold
war.
During that time, the price of nickel was determined by Inco. However,
nickel’s price gradually.
The tight supply situation encouraged new competition worldwide which in
turn forced Inco in debt trouble.
Inco lost its monopolistic position while there are a lot of competitors
worldwide.
L. Edward Grubb (chairman, CEO. Launched a 5 years investment plan)
Well- known in his cost-cutting strategy, he is not reluctant to fire workers
who were not performing well.
Picked Edward Cater as president, and Charles F. Baird as financial vice-
president.
Implementation: Only profitable nickel to be mined, and promote demand of
nickel overall. Capital expenditure, employment to finance debt, collect and
publish general market research, distribute reports on R&D effort, stop
publishing prices and detailed industry info to prevent competitors’ rivalry,
improve labour relations to avoid strike.
He pursued in diversification efforts whereby engaged in non- nickel activity
of battery making and expanded its business beyond Canada.
Inco acquired ESB Corp- a manufacturers of batteries and Daniel Doncaster
and Sons who produced high-steel metal components.
However, economic slowdown forced Inco to come to an end.
Final year
In 2005, Inco merged with Falconbridge.
In 2006, Inco was bought by CVRD. Xstrata acquired Falconbridge.