When the last editorial on the continuing problems at the Corner Brook paper mill ran in this space on May 23, Kruger Inc. had just announced plans to re-evaluate the mill’s operations because a union vote had rejected a company plan to extend the time needed to repay a pension shortfall.
Since then, the shakeout in the world paper industry has continued: in Sweden, the Rottneros groundwood pulp operation announced it would close on May 23, despite a broad-based improvement and efficiency program.
Meanwhile, in Trenton, Ont., Cascades Inc. announced it would reverse its decision and keep a containerboard mill open, after 130 workers agreed to a wage deal with concessions, apparently in the area of shift premiums, severance pay and benefits. Neither side is talking about details of the deal.
In Sault Ste. Marie, Ont., auctioneers are preparing for a sale: “Employees of Courtland Properties Management of Tilsonburg Ontario are collecting and preparing the mill’s papermaking equipment and assets for a public auction Wednesday and Thursday, June 20 and 21. The auction will be conducted by Hilco Industrial, one of North America’s leading machinery auctioning houses, to ‘a global audience’ both live and online,” the Sault This Week reported. St. Mary’s Paper went bankrupt at the end of 2011.
In British Columbia, insolvent Catalyst Paper Corp. announced May 30 that it had court approval for the sale of its assets after creditors balked at a restructuring plan. The company has three mills in B.C., and has said it was tipped into court-ordered protection by a lack of support from lenders — and by the refusal of employees at the company’s Compton mill to accept contract concessions.
And that’s only the last two weeks in the paper business.
Monday, Premier Kathy Dunderdale met with Joseph Kruger. After the meeting, there seemed to be a difference of opinion about what comes next. Kruger’s position? “I’m very, very concerned … I’m discouraged and I’m concerned about the future of the mill. It’s going to take the people of Corner Brook to make this happen.”
Dunderdale, meanwhile, was talking about reaching a “framework of support.”
“There’s an arrangement that can take place between us and Corner Brook Pulp and Paper that would be critical to the ongoing operation of the mill,” Dunderdale said. “I’m not going to discuss any detail of that today other than to say that we’re satisfied with the talks so far.”
One thing that is abundantly clear? That framework hinges on the union reconsidering its vote on the pension deal, and the company is saying there’s not much time for that.
Daniel Archambault, executive vice-president for Kruger, put it this way: “We don’t have much time in front of us. We’re evolving in a tough economic environment and a tough market, and we need to be competitive.”
Mill workers may well feel squeezed, but, with salaries and benefits often among the largest expenses for companies, the fight to be the most competitive mill — the last mill standing, as it were — will always mean less money in paycheques.
It’s a tough decision: is a job in the hand worth more than standing your ground?
It’s a battle that’s being fought weekly in this industry. And in this game of union-management chicken, there are more and more dead chickens.