Corner Brook — The wage deferral agreement reached between Corner Brook Pulp and Paper and its unionized employees last February is set to expire Dec. 31, but there is no clear date as to when workers will get their money back.
The eight unions at the mill all agreed to the concession in order to help the mill get through the ongoing tough economic times the entire newsprint industry is struggling with.
The 10 per cent reduction in pay was to remain in effect until the end of 2010. It could have ended earlier if the company and its unions renewed their collective agreements, but those negotiations have not even begun in earnest.
The lost wages, according to the wage deferral agreement, will be paid back to the employees when Corner Brook Pulp and Paper returns to profitability and has recovered the accumulated losses incurred since Jan. 1.
Stéphane Rousseau, Corner Brook Pulp and Paper’s new vice-president and general manager, said the mill is not there yet, but hopes to return to profitability some time in 2011. The wage deferral program and other initiatives have reduced the operation’s costs in the last year, which Rousseau said was a positive sign, but more work needs to be done before the wages can be repaid.
“There is nothing that Mr. (Joe) Kruger and ourselves would like better than to be in a position to pay those wage deferrals back,” Rousseau said in reference to the board chairman and chief executive officer of Kruger Inc., the Corner Brook mill’s Montreal-based parent company.
“For the moment, our key initiative is to be competitive enough to be profitable and be competitive enough to fight the Abitibi and White Birches of this world.”
AbitibiBowater, which just emerged from creditor protection, and the White Birch Paper Co., which is currently going through that same process in order to restructure its own business model, are two of Corner Brook Pulp and Paper’s primary competitors in North America.
Rousseau hopes the restructuring Corner Brook Pulp and Paper is going through under its own power will help keep it ahead of those rival companies vying to strengthen their own place in the market.
“Our objective is to reach a profitable level in 2011,” he said. “We did our budget accordingly, but our budget contains major initiatives that are part of the plan to bring us to a competitive level that would make us profitable. Without making changes, we would still lose money in 2011. So we are really pushing hard for those initiatives to take place.”
Corner Brook Pulp and Paper has developed a master plan and has presented it to its unions. Gary Healey, national representative for the Communications, Energy and Paperworkers Union of Canada — which represents seven of the mill’s eight unions — said the workers are prepared to do what they can to help the mill reach its goals.
“Everybody is hoping that some time in 2011, it will actually return to profitability,” Healey said.
“There are projects planned for the new year that may steer the ship in the right direction.”
Meanwhile, Healey said negotiations for new collective agreements are still at the preliminary stage and nothing significant will take place until the picture with White Birch becomes clearer.
“Having went through the process with Abitibi, it would be very difficult for me to speculate how that process might be unfolding,” Healey said.
“It’s a complicated process. I think trying to predict the outcome wouldn’t be a very wise thing to do because there are so many possibilities that could happen.”
The Western Star