Abitibi walks away from talks

Terry Roberts
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Says it and province far apart on compensation figure

The government and AbitibiBowater can't agree on how much the province should pay for the company's hydroelectric assets.

"At this point in time, talks have broken off between the government and Abitibi," Natural Resources Minister Kathy Dunderdale told the House of Assembly Monday afternoon.

Natural Resources Minister Kathy Dunderdale speaks to the media about talks that have broken off with AbitibiBowater regarding compensation for the company's assets in Grand Falls-Windsor. - Photo by Keith Gosse/The Telegram

The government and AbitibiBowater can't agree on how much the province should pay for the company's hydroelectric assets.

"At this point in time, talks have broken off between the government and Abitibi," Natural Resources Minister Kathy Dunderdale told the House of Assembly Monday afternoon.

Outside the House, she told reporters the company walked away from negotiations early last week.

Last fall, the province expropriated the company's hydro and timber rights after Abitibi announced it would permanently shut down the paper mill in Grand Falls-Windsor at the end of this month.

At the time, the province said it would reimburse Abitibi for the so called bricks and mortar assets related to power generation for the Grand Falls-Windsor paper mill.

The company has publicly put the price tag for those assets at $300 million.

Dunderdale says the government's figure is lower than that, but would not say just how far apart the two sides are.

She said the province has a clear idea of how much it thinks the assets are worth and has determined a range of value it would be willing to pay Abitibi.

But Dunderdale said the province wouldn't go beyond that range just to settle up with the company.

She also said the company knows the province will not compensate it for the expropriated water and timber rights.

AbitibiBowater spokesman Jean-Philippe Cote confirmed Monday the two sides are at an impasse.

"The value they are envisioning is way too low compared to what we believe they are worth and what we believe we can get," he said.

Cote stressed that the company was eager to discuss the sale of its assets with the provincial government, even before the province passed the expropriation legislation.

He said the company remains committed to "reasonable and realistic dialogue," but also cautioned that it will continue to challenge the expropriation under the North American Free Trade Agreement (NAFTA).

Dunderdale also said both sides had been discussing two other issues - the company's liability for environmental remediation and severance packages for loggers.

"We have said very straightforwardly to AbitibiBowater, 'We think this is an obligation you have, given that you paid severance to loggers in Stephenville who you didn't have a legal obligation to pay,'" said Dunderdale.

"We have discussed all of these issues. We haven't resolved any of them," she continued. "They have not said to us that any of these issues are off the table or not up for discussion."

Cote did not comment on those other two issues.

A spokesman for the Communication, Energy and Paperworkers union in Grand Falls-Windsor said he wasn't surprised by AbitibiBowater's move.

"They always seem to take the type of action that seems less productive, and I'm trying to be polite here," said Gary Healey, whose union represents the bulk of the roughly 750 people who are losing their jobs.

Dunderdale said the province is prepared to talk with the company whenever it's ready.

"We will continue to deal with AbitibiBowater, or we deal with receivers, or we may have to deal with it under a NAFTA challenge," she said.

Dunderdale said no further talks with the company have been planned at this time.

dbartlett@thetelegram.com

Organizations: AbitibiBowater, NAFTA, Paperworkers union

Geographic location: Abitibi, Grand Falls-Windsor, Stephenville

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Recent comments

  • Journeyman
    July 02, 2010 - 13:32

    To AT: We newfoundlanders are certainly involved but seem to know little about the facts.

    The timberights are not in question. They were licenses that the gov't can and did already revoke. Neither is the mill but you are right in one respect as it is junk.

    These negotiations are over the expropriated hydro assets. Abitibi had the water rights on the exploits and either by itself or in partnership with others built several hydroelectric projects. Any idea what a hydro dam costs? how about several? I don't and I suspect most of the readers of this won't either but hundreds of millions is likely the reality.

    Paying for the assets may also not be the governments only concern as one of those assets they expropriated is not on the exploits watershed per the original AND Co. agreement and that is where the company may win a NAFTA challenge. If that is the case $300 million might be the price the company 'requires' to drop it and get out of NL. Otherwise the legal battle and final decision may cost much more than that.

    Unfortunately, if the poor workers in Grand Falls have to wait for a severance from the outcome of this they will be waiting a long time.

  • Patrick
    July 02, 2010 - 13:28

    Boy, we are in hard shape if we depend on Dunderdale to do anything for us. If this is the best they got in government, God help us!

  • Frank
    July 02, 2010 - 13:26

    This is very unfortunate about the mill closure. it's almost like the ghost of The International Woodworkers Of America is coming back to haunt us. They tried to burn Newfoundland and now the management of the Mill in Grand Falls wants out before the going gets too hot and they have to pay up.

    They can blame it on the economic crisis worldwide, but someone was raking in a profit before they decided to throw in the towel! Here we go, getting raked over the coals again..
    I think kathy should sit down with Danny and say, hey, enough is enough, take over the whole mill and get something working here and get back what the workers are owed.

    I think kathy is preoccuppied with oil, and paper to write the imaginery gross oil profits on is not important, after all she has a lot of staff who use computers today!!

    Frank Blackwood
    Richmond Hill,
    Ontario

  • Nasty
    July 02, 2010 - 13:23

    Wonder if Kathy saw this one about to hit the province as well.

    Those that do not get the axe will be moved here to replace those on the offshore and in St. Johns offices. Whats your plan for these people about to face the corporate axe? Thing is you have no clue as to the levels these people are playing on, nor can you fight what you do not know.

    Todays oilpatch mega-merger will trigger a quick and significant round of layoffs as Suncor seeks to cut $300 million in yearly operating costs after it unites with Petro-Canada, Suncor CEO Rick George said this morning.


    I dont want to minimize the concern about jobs, especially in these difficult times, he told a news conference today. But I do want to underline that, in the mid to long-term, with the plans we have ahead of us, this merger will be a strong contributor to job creation as we pursue growth in ways that would not be achievable on a stand-alone basis.


    Combined, the two Calgary oil giants employ 12,500 people in the city and worldwide. George pledged work hard to complete the staffing process quickly to minimize the uncertainty for our people.


    Job losses have already reverberated around the oilpatch in recent months as plummeting oil and gas prices have forced companies to shed costs and delay major oilsands projects including postponements by both Suncor and Petrocan.

    The last megamerger in Calgary was when PanCanadian Energy Corp. and Alberta Energy Co. combined to form EnCana in 2002. Weeks after that deal, the new firm cut 310 jobs from a total workforce of 3,800

    Oh the funtimes to come. I feel for ya Danny, I really do. I have seen the levels that these corporations go to, and you are a bit player on this game board with little backing to fight them.

  • Tim
    July 02, 2010 - 13:23

    I wonder when the province will start job sharing here to help share the wealth? Wonder who would like to take over her job for six months and grab that pay cheque. Looks like a diet is in order for all the the current members.

    I am sure many people are fully qualified to step into the shoes of others, time to start a plan like this to prevent more people onto EI. Anyone seen the recent numbers? Not looking very good.

  • Graham
    July 02, 2010 - 13:16

    Imagine that the Williams Government more concearned about Hydo assets than they are about the people looseing their jobs and probably not getting severance pay. Great job Danny. No wonder your so popular.

  • steve
    July 02, 2010 - 13:15

    Graham....... I tend to agree with you, you must have me converted to your way of thinking... ;-)
    There may be a job for you in the future...right here in the good Newfoundland and Lab....unless Danny calls you a traitor! Then your screwed.

  • Gord
    July 02, 2010 - 13:12

    talks have broken off ----- will do. Never mind the at this point in time crap.

  • AT
    July 02, 2010 - 13:12

    I always understood the grand falls paper mill got the timber rights on the condiion that they would employ Newfoundland people. They did employ people but now they have stopped employing people so I do not understand why Gov must pay anything for the peoples timber lands.
    Hydro assets;
    In private business the bank would pay for an appraisal. This is a large $ figure so have three banks do the appraisal and have the appraised figure divided by 5 (years)and start from there. This is old and outdated hardware assets so Company must realize that and take a substantial discount for its obsolete goods that are to be sold. Who wants the old buildings and broken down machinery, tractors etc. etc

  • Greg
    July 02, 2010 - 13:10

    It's sad the GF mill is closing.
    However, Abitibi's assets should be sold at market value.
    I sometimes wonder if the goverment really didn't care if it closed or not. They need the hyro for the new BIG SMELTER.
    I think they took Abibiti's hyro assets to get in on the cheap .
    Abitibi could of used the money for their current financal problems which would help insure the hundreds of NL Abitibi pensioners would keep their pensions

  • Journeyman
    July 01, 2010 - 20:20

    To AT: We newfoundlanders are certainly involved but seem to know little about the facts.

    The timberights are not in question. They were licenses that the gov't can and did already revoke. Neither is the mill but you are right in one respect as it is junk.

    These negotiations are over the expropriated hydro assets. Abitibi had the water rights on the exploits and either by itself or in partnership with others built several hydroelectric projects. Any idea what a hydro dam costs? how about several? I don't and I suspect most of the readers of this won't either but hundreds of millions is likely the reality.

    Paying for the assets may also not be the governments only concern as one of those assets they expropriated is not on the exploits watershed per the original AND Co. agreement and that is where the company may win a NAFTA challenge. If that is the case $300 million might be the price the company 'requires' to drop it and get out of NL. Otherwise the legal battle and final decision may cost much more than that.

    Unfortunately, if the poor workers in Grand Falls have to wait for a severance from the outcome of this they will be waiting a long time.

  • Patrick
    July 01, 2010 - 20:16

    Boy, we are in hard shape if we depend on Dunderdale to do anything for us. If this is the best they got in government, God help us!

  • Frank
    July 01, 2010 - 20:14

    This is very unfortunate about the mill closure. it's almost like the ghost of The International Woodworkers Of America is coming back to haunt us. They tried to burn Newfoundland and now the management of the Mill in Grand Falls wants out before the going gets too hot and they have to pay up.

    They can blame it on the economic crisis worldwide, but someone was raking in a profit before they decided to throw in the towel! Here we go, getting raked over the coals again..
    I think kathy should sit down with Danny and say, hey, enough is enough, take over the whole mill and get something working here and get back what the workers are owed.

    I think kathy is preoccuppied with oil, and paper to write the imaginery gross oil profits on is not important, after all she has a lot of staff who use computers today!!

    Frank Blackwood
    Richmond Hill,
    Ontario

  • Nasty
    July 01, 2010 - 20:08

    Wonder if Kathy saw this one about to hit the province as well.

    Those that do not get the axe will be moved here to replace those on the offshore and in St. Johns offices. Whats your plan for these people about to face the corporate axe? Thing is you have no clue as to the levels these people are playing on, nor can you fight what you do not know.

    Todays oilpatch mega-merger will trigger a quick and significant round of layoffs as Suncor seeks to cut $300 million in yearly operating costs after it unites with Petro-Canada, Suncor CEO Rick George said this morning.


    I dont want to minimize the concern about jobs, especially in these difficult times, he told a news conference today. But I do want to underline that, in the mid to long-term, with the plans we have ahead of us, this merger will be a strong contributor to job creation as we pursue growth in ways that would not be achievable on a stand-alone basis.


    Combined, the two Calgary oil giants employ 12,500 people in the city and worldwide. George pledged work hard to complete the staffing process quickly to minimize the uncertainty for our people.


    Job losses have already reverberated around the oilpatch in recent months as plummeting oil and gas prices have forced companies to shed costs and delay major oilsands projects including postponements by both Suncor and Petrocan.

    The last megamerger in Calgary was when PanCanadian Energy Corp. and Alberta Energy Co. combined to form EnCana in 2002. Weeks after that deal, the new firm cut 310 jobs from a total workforce of 3,800

    Oh the funtimes to come. I feel for ya Danny, I really do. I have seen the levels that these corporations go to, and you are a bit player on this game board with little backing to fight them.

  • Tim
    July 01, 2010 - 20:07

    I wonder when the province will start job sharing here to help share the wealth? Wonder who would like to take over her job for six months and grab that pay cheque. Looks like a diet is in order for all the the current members.

    I am sure many people are fully qualified to step into the shoes of others, time to start a plan like this to prevent more people onto EI. Anyone seen the recent numbers? Not looking very good.

  • Graham
    July 01, 2010 - 19:56

    Imagine that the Williams Government more concearned about Hydo assets than they are about the people looseing their jobs and probably not getting severance pay. Great job Danny. No wonder your so popular.

  • steve
    July 01, 2010 - 19:55

    Graham....... I tend to agree with you, you must have me converted to your way of thinking... ;-)
    There may be a job for you in the future...right here in the good Newfoundland and Lab....unless Danny calls you a traitor! Then your screwed.

  • Gord
    July 01, 2010 - 19:50

    talks have broken off ----- will do. Never mind the at this point in time crap.

  • AT
    July 01, 2010 - 19:49

    I always understood the grand falls paper mill got the timber rights on the condiion that they would employ Newfoundland people. They did employ people but now they have stopped employing people so I do not understand why Gov must pay anything for the peoples timber lands.
    Hydro assets;
    In private business the bank would pay for an appraisal. This is a large $ figure so have three banks do the appraisal and have the appraised figure divided by 5 (years)and start from there. This is old and outdated hardware assets so Company must realize that and take a substantial discount for its obsolete goods that are to be sold. Who wants the old buildings and broken down machinery, tractors etc. etc

  • Greg
    July 01, 2010 - 19:46

    It's sad the GF mill is closing.
    However, Abitibi's assets should be sold at market value.
    I sometimes wonder if the goverment really didn't care if it closed or not. They need the hyro for the new BIG SMELTER.
    I think they took Abibiti's hyro assets to get in on the cheap .
    Abitibi could of used the money for their current financal problems which would help insure the hundreds of NL Abitibi pensioners would keep their pensions