© James McLeod/The Telegram
The Ocean Choice International fish plant was wrecked in Port Union when flood waters from hurricane Igor overflowed a nearby pond and tore through the building.
Ocean Choice International's closure of two troubled plants has put more than 400 employees out of work, but critics of the decision are vowing not to give up.
Sam Synard, mayor of Marystown - which saw 240 jobs disappear with the announcement Friday by Martin and Blaine Sullivan of Ocean Choice - said the town isn't going to sit idly by.
"Our hope is that we can somehow convince Ocean Choice to reverse their decision, or we can somehow find some other operator to operate that fish plant and make it viable," he said. "It's really hard to give up on an operation that's been here since 1967."
The closures come a week after an external audit found the Marystown plant has lost $10 million over the last three years.
The losses are blamed largely on fluctuating foreign exchange rates and rising fuel costs, as well as increased expenses and overhead.
Blaine Sullivan, Ocean Choice's chief operating officer, said Friday the company has invested millions trying to make the plant viable. "But there comes a time when we must be satisfied that we have exhausted all possibilities. And, frankly, we have," he said.
The Port Union plant was actually closed by hurricane Igor in 2010, and hasn't been opened since, with onerous repair costs cited. But Sullivan said declining shrimp quotas - from 174 million pounds in 2008 to 107 million pounds in 2011 - were a factor in shuttering the plant for good, putting 170 people out of work.
"That's a 40 per cent reduction," he said. "These reductions would mean far too few weeks of work at Port Union to make the operation viable."
'The critical factors are beyond our own control'
Chief executive officer Martin Sullivan blamed an over-regulated provincial industry.
"We have come to the conclusion that sometimes things that are broken cannot be fixed, especially when all the critical factors are beyond our own control," said Sullivan, reading from a prepared statement. "The fishery in Newfoundland and Labrador needs to change. It has been crying out for rationalization for years. Unfortunately we - the collective we, government, union and industry - have not been able to agree on the right path forward."
Despite the Deloitte report on the Marystown plant and the 15 months of inactivity in Port Union, Friday's announcement was still a shock to the industry.
Synard said Martin Sullivan spoke at a luncheon in Marystown on Thursday - and Ocean Choice representatives also met with the town - and didn't give any indication about what was to come with the announcement the next day.
"They left the impression that they would make some sort of announcement before the end of the calendar year on the future of the fish-plant business that would include Marystown," he said. "So I didn't expect an announcement to come just some 15 or 16 hours after that meeting. ... To be told today that we don't have a role to play in the future of the fishery is a hard pill to swallow, and one that we're not going to swallow easily."
Jim Dalton, Fish, Food and Allied Workers' union unit chairman at the Port Union plant, declined an invitation to attend the meeting with OCI in St. John's Friday.
"They should come out to meet with us, that's what they should have done.They haven't got the gumption to come out here and face their employees," he said, adding after Igor he doubted OCI would ever reopen the plant.
Dalton also doesn't buy the company's argument that declining shrimp quotas are hindering the plant's viability.
"If we had just a small portion of what is caught and processed offshore, we could make a go of it. The company is stuffing their pockets full. Meanwhile, it's a public resource and we're not getting anything. I've got no sympathy for Martin Sullivan."
He believes the Port Union shrimp plant could be a viable operation, given enough raw product. He blames the provincial government for allowing too many pounds of shrimp to be shipped overseas.
"The government is in there, sitting around and ignoring plant workers. We will not be ignored any longer."
Port Union is not the only town hit hard by OCI's decision. Plant workers at Port Union come from Melrose, Catalina, Little Catalina, Bonavista, Five Coves, Elliston and Trinity.
While OCI had promised a $5-million investment for its remaining processing plants, including neighbouring Bonavista, Dalton doesn't expect many jobs for the workers left unemployed now.
While workers in Marystown occupied the fish plant there, all was quiet in Port Union. However, Dalton vows it won't be for long.
"We will disrupt OCI. We will disrupt OCI all over the island. We'll shut down Newfoundland, and we can do it."
He says protests and picket lines may be in place as early as next week.
Earle McCurdy, president of the FFAW that represents plant workers, said making the fishery more profitable can't come on the backs of plant workers through processing exemptions.
"It's devastating news for 400 Newfoundland families, but also for the communities - not only Marystown and Port Union, but in both cases a number of surrounding communities as well," he said. "Quite frankly, it's not good enough to say that the best that the company can do, with privileged access to our natural resources, is to ship off all the jobs to another country, and we expect the provincial government to tell them there will be no exemptions. We expect the government to step up and play a role here. We've asked for a meeting with the (Fisheries) minister and also we'll be looking for a meeting with the premier. She made a commitment to that effect during the election campaign to meet with us on the Marystown situation."
Jim Bennett, Liberal MHA for St. Barbe, called the closures a blunt-force approach to the problem.
"I can't say I'm surprised, because they seem to have been positioning for this for some time now," he said. "They seem to want to find some way, some excuse or mechanism, to get out gracefully. But it seems like the local people and the industry generally have been putting up an information fight which shows that their justification they were using, it looks like it isn't true, so they've just gone ahead and used the heavy-handed approach of closing it."
Premier's comments questioned
McCurdy also took issue with Premier Kathy Dunderdale's comments Friday morning - before the Ocean Choice announcement - the government wouldn't prop up unprofitable fish plants.
"We spent hundreds of millions of dollars and it didn't serve anyone well," said Dunderdale on Friday morning. "For years and years and years in this province, government propped up the fishery. We invested hundreds and hundreds of millions of dollars into the fishery, but the fishery was no better off as a result of it, and people were still impacted negatively."
McCurdy said the government has no plan at all for the fishing industry.
"The terminology she uses is very pejorative. At the moment, the government appears to have no policy for the fishery whatsoever," he said. "It went through an endless exercise with the (memorandum of understanding) and then they just dismissed it, knowing full well months and months ahead what was going to be in it. They didn't try and change the course of the discussion whatsoever and then just dismissed it out of hand."
"Everybody has identified there are challenges in the industry that need to be addressed," he said.
"The fundamental issue is how you address the challenges and when you try and address the challenges, the reaction that you get. It's always a catch-22. People will identify, for example, that there are too many processing facilities in the province, yet you see today the reaction to one closing or two closing is very negative."
King said the province's processing regulations are in place because the fish belong to the people of Newfoundland and Labrador.
"The minimum processing requirements that we have in the province ... those were put there for a purpose, and the purpose was to ensure that our province and the people who work in the industry receive maximum benefits from the fishery. You have to remember that fish in the ocean is a common resource owned by the people of the province, and how you define maximum benefit is open to interpretation. The company is obviously indicating they see maximum benefit as being able to process all at sea and ship out of the province, and the benefit would be the spinoffs, I guess, from the fuel and the purchases for the offshore vessel and the harvesting jobs. The province has not always seen it that way. We see maximum value to include processing jobs on land."
McCurdy also said Ocean Choice shouldn't have taken so long to decide the future of the Port Union plant.
"I don't know why it took the company 15 months after that hurricane to make this decision, other than they appeared to be using the plant workers as leverage in terms of leaving them out there to squeeze the maximum settlement they could out of the insurance company, when it seemed very clear - although they would never confirm that - that it was out of the question that there be any outcome of the insurance negotiations that would save those jobs there."
Blaine Sullivan said the company will move forward with its flatfish business to include more viable options as laid out in the Deloitte report, including catching and processing at sea, as well as transitioning Fortune to a multi-species groundfish processing plant, which Ocean Choice estimates would provide 110 year-round jobs.
Sullivan also said the company will work with the union, the provincial government and the two towns to help affected workers.
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