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CASE 8.docx

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York University
Administrative Studies
ADMS 1010

CASE 8: THE END OF MONOPOLY:ANEW WORLDAT INCO THE VIEW FROM NEWYORK PLAZA - 1972, headquarters was located in NY; Edward Grubb wanted to fix Inco from its downward performance - Grubb worked at Inco U.K. managing its subsidiary of Inco; wasn’t reluctant to fire people ASURPRISING CHANGING OF THE GUARD - Before Grubb’s arrival, Henry Wingate held the top position as CEO at Inco since 1960 - Wingate was retiring and chooseAlbert Gagnebin as his successor, but the board named Grubb to succeed Henry Wingate; Grubb received the title of CEO ANNUS HORRIBILIS, ANNUS MIRABILIS,ANNUS HORRIBILIS - 1969: poor labour relations exacerbating the country’s other troubles o Difficult contract negotiations with the United Steelworkers ofAmerica ended up striking for 4 months (17000 people) before new agreement was signed - 1971: sales dropped 25% and profits were more than halved o Shares on the Dow Jones were changing and Inco was becoming less of a blue chip company - Inco had suffered more than its competition, accounting for 80% of the industry’s decline while smaller competitors (Falconbridge) fared better - Inco’s loss of its monopolistic position became increasingly evident - In 1960: 12 nickel companies in the world o By mid-1970’s: twice as many producers worldwide - Weak market and large inventory charges coincided with peaking debt payments on Inco’s capital expansion program TIMES HAD CHANGED - Nickel industry was changing - From the end of the second world war until mid-1960s, nickel had enjoyed a prolonged period of above-average growth o In 2 decades prior to 1965, demand grew at an average of 6%  Due to: European reconstruction, WWII (required high demand of nickel), uses of nickel (stainless steel industry), growth of Japanese industry, military demands (Korean war and Cold
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