Kennedy, Byrne square off over Corner Brook mill

James
James McLeod
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Natural Resources Minister Jerome Kennedy speaks with reporters Friday to criticize Liberal MP Gerry Byrne for an ad Byrne inserted in The Telegram’s sister paper, The Western Star. The ad announces a public meeting to give what Byrne calls “the real story” on the Corner Brook pulp and paper mill. — Photo by Gary Hebbard/The Telegram

Natural Resources Minister Jerome Kennedy said Friday Corner Brook Pulp and Paper is on the verge of bankruptcy and Liberal MP Gerry Byrne is making a bad situation worse.

Byrne plans to hold a public meeting in Corner Brook Sunday to address the situation at the troubled paper mill.

Kennedy said holding the meeting is “irresponsible” and would just “inflame” an already precarious situation.

But Byrne was quick to fire back, saying he just wants to talk about the facts of the situation.

“There’s no opinions to be expressed here. This is factual information,” Byrne said. “If good, third-party, independent information is dangerous, then it sounds like someone trying to be railroaded into making a deal which the facts don’t support.”

The Corner Brook paper mill has been on shaky ground since the beginning of the year. The company says it’s suffering from high labour costs and crushing pension obligations.

Premier Kathy Dunderdale said she has agreed on a “framework” with the mill’s parent company, Kruger Inc. to support future operations.

However, before the province steps in, Dunderdale has said the unions, pensioners and company have to come to agreements on how to restructure things so the mill can operate on a more stable footing.

Kruger has said if they can’t reach a deal by June 15, it will close the mill.

Friday afternoon, Kennedy called media to Confederation Building to say Byrne’s weekend plans for a public meeting are making a tense situation worse.

“I don’t feel it’s appropriate for anyone to be inflaming this present situation,” Kennedy said. “This situation affects the families, the workers, in general the members of the Corner Brook community and the forest industry in this province as a whole.”

Byrne brushed the attack off, saying Kennedy is doing more than anyone to add to the tension.

“Kennedy keeps on making the statement, ‘I have grave, grave concerns about the future of this mill.’ He’s given about seven press conferences where he’s invoked dire concerns about the mill unless labour concessions are assented to,” Byrne said. “Perhaps Mr. Kennedy should follow his own advice.”

But Friday, Kennedy said he’s intimately aware of how bad the situation is.

Kennedy said Corner Brook Pulp and Paper has an $80-million unfunded pension liability, and other substantial debts.

“Corner Brook Pulp and Paper is on the verge of bankruptcy,” he said. “The liabilities are enormous.”

Kennedy said if the company slides into bankruptcy, pensioners might be one of the biggest losers, since the pension fund is an unsecured creditor.

Byrne said he doesn’t believe things are as grim as that.

“What I think people will come to understand is that there’s a real solid case, an argument to be made that cooler heads should prevail, and that arbitrary deadline should be lifted,” Kennedy said.

Sunday’s meeting will involve a presentation of information from a report by Fisher International, a U.S.-based company.

Fisher looked at the efficiency and cost characteristics of Corner Brook Pulp and Paper and also analyzed the entire newsprint industry of North America and compared Corner Brook to every one of its competitors.

The Fisher report was originally done in February, but Byrne said the presentation will also involve some information that has been provided to him in the last few days.

 

jmcleod@thetelegram.com

Twitter: TelegramJames

Organizations: Kruger Inc., Fisher International

Geographic location: Corner Brook, U.S., North America

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Recent comments

  • Ed. Anstey
    June 11, 2012 - 11:39

    if the premier had any guts or common sense she would send every member of the pc government to watch gerry's presentation or is she afraid that honest information might make them vote against her and kennedy's reccommendations. sad to say but the PC party has been taken over by a bunch of losers. bring on the next election.

  • bayguy
    June 11, 2012 - 06:33

    Was it not Jerome who greatly "inflamed" the Doctors pay situation ?. Pot calling the Kettle.

  • Gord
    June 10, 2012 - 20:55

    "Fisher looked at the efficiency and cost characteristics of Corner Brook Pulp and Paper and also analyzed the entire newsprint industry of North America and compared Corner Brook to every one of its competitors." Man, that is information I would like to see. Kruger thought the plant was overstaffed. This report would either support or refute that claim. Knowing the cost/ton, and comparing it to the competition would also be good info. That would be the basis for keeping the plant open if it can be cost competitive or not.

  • Jeaola
    June 10, 2012 - 15:52

    The union workers need to vote for their jobs instead of the extension on the repayment of pension liability. I hope they have the good sense to realize this.

  • WIlliam Daniels
    June 09, 2012 - 21:15

    Kennedy and Co. have dumped 40 + million into this mill since 2006. Who's the dummy?

    • Christopher Chafe
      June 10, 2012 - 12:40

      And just how much money has been wasted/dumped into the fishery by the liberals since 1992?

    • William Daniels
      June 10, 2012 - 13:45

      Good one chrissy. bahaha. That the best ya got?

  • Randy
    June 09, 2012 - 17:28

    Kennedy is a big mouthpiece for big business, Joe Kruger, big oil and mining companies, etc. He has zero credibility.

    • David
      June 10, 2012 - 11:39

      I'm just curious...who do you think actually "funds" Newfoundland, or any other place? Government or so-called 'big business'? Of course Kennedy is beholden to big business....and if the rest of you had a clue whatseover, you'd know that that is how the actual world beyond these destitute shores functions. Life hint #1: governments have never supported or improved the quality of anyone's life using taxes collected from a tiny rich group, presumably made oup of lottery winners and inheritances (?), and redistributing that revenue, terribly inefficiently to boot, to other people who are even worse off than the first bunch. It is only silent, insidious operation of the transfer payment system that has allowed people here the luxury of presuming it is simply manna from heaven, not tax money from real people. Life hint #2: Beggars cannot be choosers ---- let alone demanders.

  • Ed. Anstey
    June 09, 2012 - 16:02

    jerome kennedy and cathy dunderdale is only mouthpieces for joe kruger. they do not care one little bit about the people of nfld. its all about getting reelected. the last poll should tell them something. YOURE DONE STUPID.

  • FINTIP
    June 09, 2012 - 15:03

    If Kennedy is telling the truth, then the impending bankruptcy of Corner Brook Pulp and Paper must be Kathy Dunderdale's worst nightmare. There are the job losses, the loss of the province's last stake in the wood fibre industry, the impending alienation of three million acres of land, the resulting environmental clean-up costs, the unfunded pension liability, and the economic impact on the West Coast. While these should be the concerns that are front and centre for this government, they are likely overshadowed in this case by an even bigger worry for Dunderdale. It is that the closure of the Corner Brook mill will be the last gust of wind that brings down the House of Cards otherwise known as Muskrat Falls. With the mill operations removed from the already exaggerated demand forecasts for Newfoundland Hydro, and an extra 125 MW from the Deer Lake hydro-electric station freed up, the last vestige of public support for Muskrat will be gone. This is not to imply that the power demands of the mill were in any way a legitimate factor in this government's irresponsible and incomprehensible fixation on Muskrat Falls. The raw economics of this project were disastrous right from the get-go. In fact Government's case for this project has been so flawed, so inconsistent, and so irrational that its critics were often left wondering where to start. It is reminiscent of one of those Whac-A-Mole arcade games. You smash it over the head when it pops up in one spot only to have it pop up somewhere else a second later. It is the great opportunity for exporting power to the U.S. - no, it is the market in the Maritimes - no, it is the Island demand - no, it is the Holyrood generating station - no, it is the industrial demand in western Labrador - and no, last going off and the most absurd of all, it is the expectation that the limited capacity Muskrat line can carry 5,000 MW of wind power from Labrador to the U.S. (NALCOR can't get a take-or-pay export deal for Lower Churchill power unless it is well below the cost of production but it can argue a demand for Labrador wind power - a generating source that could easily be replicated on the island, in the Maritimes or - even closer to the end user - in the north east United States.) No the facade is coming down, the lipstick is rubbing off the pig, and the charade is (hopefully) almost over. Seemingly this was never about Island needs. It was never about export markets. Clearly it was about duping residential ratepayers into subsidizing utility costs for fat-cat corporations that want to enrich themselves with our non-renewable resources. As a unapologetic supporter of the Williams government, I am disappointed that our ex-premier - one hardly in need of of cash - chose to lend his support to this kind of corporate gouging and fear mongering by adding his name to their board of directors. I still admire the oft-maligned Brian Peckford for moving to B.C. in search of work rather than subject himself to criticism at home for taking on gigs that some might consider a conflict of interest. This is a man still vilified for an honest, if foolish, $20 million mistake - a politician who left government with his pension but little else, and one whose right to even have an opinion on Muskrat Falls is begrudged by the Muskrat booster club. Pecford's indiscretion pales in comparison with the potential catastrophe in the making if Muskrat Falls is allowed to pass decision-gate-3. What Dunderdale and Williams are both flirting with is a multi-billion dollar mistake that would dwarf the infamous original sin committed by Smallwood. Whether Corner Brook Pulp and Paper stands or falls (hopefully the former), this should be Dunderdale's wake-up call. With oil prices falling, electrical demand drying up, the cost of construction in this province soaring, and the international economy in disarray, she and her government must accept the reality that now is not the time to push forward with a high risk, publicly funded gambit that could cripple this province financially for generations to come. Let Alderon and others know in no uncertain terms that if they want our non-renewable resources, they will have to bear the real costs of extracting it - not look to the Newfoundland taxpayer and homeowner to subsidize their corporate profits. If the aggregate demands of Alderon and other industrial users in Labrador are sufficient to justify Muskrat, then let them enter into take-or-pay contracts to allow its development. But it must be done without putting the taxpayer at risk, without an unnecessary inter-tie with the Island, and without a speculative link with the Maritimes. If that volume of demand is not there, let them develop some of that wind-power and back-stop it with recall power. If they don't like any of those solutions, then let the ore sit in the ground until they persuade the federal government to do what it should have done fifty-years ago - intervene with Quebec to allow this province the right to wheel its power to market in the way that energy has been allowed to cross provincial boundaries in every other part of the country for the past century.

    • Mad Max
      June 09, 2012 - 17:48

      Hydro projects NEVER lose money in the long run. Your argument hinges on the fact that oil will stay low. Joey thought power rates would stay low too. I would gladly pay $30/ month more on my light bill just to stick my finger in the eye of Hydro Quebec! I also think Jerry has got to go....I voted Trevor Taylor last time...he's been in too long with little REAL representation.

    • David
      June 09, 2012 - 18:02

      If you can't make a point briefly, you have no point to make. I don't read verbose rants.

    • charlie
      June 10, 2012 - 15:12

      Fintip, To add to that Jerome Kennedy just appointed Joan Burkes boyfriend as Chair of the board of directors for Nalcor and Hydro. He sells beer for a living but is now chair of Nalcor and Hydro. Interesting choice to head up the board of directors for Nalcor and Hydro!

  • KD
    June 09, 2012 - 13:24

    According to byrne and the ndp party kruger is rolling in money what a joke these people are if you had a business and no one wanted your product such as is the case for paper and unless you live in a cave someplace where fire is not yet invented you should know the need for paper has greatly dimished over the past years with the invention of e mail, fax machines and all other devices I would bet byrne like everyone else these days use very little paper just using the situation for political points One thing I must say is how pleased I am even though most of the time i vote pc is with the way the nl liberals are dealing with this situation seems like a complete change looks good on them

  • JAMES
    June 09, 2012 - 13:02

    my question: why do the people keep electing byrne? i am surprised he didn't blame harper for krugers problems. gerry boy will go back to ottawa at our expence, collect his fat wage which he doesn't deserve, and wait out the day he will leave parliment and collect his big pension @ our expence. so go away gerry, you and scott simms, who whined about abitibi-bowater, have nothing to offer.

  • m
    June 09, 2012 - 11:45

    Jerome Kennedy unfortunately speaks the truth. Truth is Kruger can walk away from this mill and the pension liabilities and not miss a beat. The numbers Gerry Byrne intends to trot out about the cost structure of the mill do not matter; if the union doesn't vote for an extension on the repayment of the pension liability the mill will shut down. Gerry is a shameless self promoter who is using this tenuous situation to score cheap political points. If the mill closes he goes back to Ottawa and his job. Its the workers and pensioners left to deal with the mess. How the people on the west coast haven't figured this guy out yet baffles me.

    • Holden
      June 09, 2012 - 12:07

      The truth is the company bankrupt, so why is there a need to do any negotiations. So said Jerome Kennedy. I wonder what the company thinks of this apparently incompetent Minister. More importantly, I also wonder what the company's creditors are thinking right now.

  • Maurice E. Adams
    June 09, 2012 - 11:00

    How can the government already have agreed to a framework with the mill's parent company when it has no idea what kind of agreement if any the company and the union might come up with?

  • Randy
    June 09, 2012 - 09:33

    It's okay for Kennedy to inflame the situation and do Kruger's work by negotiating with workers for him through the media, but everyone else should back off. Kennedy has zero credibility. Time for him to get out of politics.