Last Friday, it was Natural Resources Minister Jerome Kennedy, urging federal Liberal MP Gerry Byrne not to pour more fuel on the fire with irresponsible comments about the Corner Brook mill. (That urging came during the same session where Kennedy announced that the mill finances were worse than precarious: “Corner Brook Pulp and Paper is on the verge of bankruptcy. … The liabilities are enormous,” so it can easily be argued that Kennedy was effectively pouring more fuel on the fire himself.)
At a presentation on Sunday, Byrne offered up reasons why the mill has distinct advantages — primarily as a result of low-cost electricity. He had already had his own comments about Kennedy: “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. … Perhaps Mr. Kennedy should follow his own advice.”
With the ball back in the provincial court, Premier Kathy Dunderdale offered up a backhand of her own on Monday: “For Gerry Byrne, on very limited information, to wade into the middle of this debate, is unfortunate in my view. We’ll see what the consequences of it are in the long term. … I think the timing is not good. … We have been watching this plant in Corner Brook for over five years, and it hasn't made money in a long time. Not only has it not made money in a long time, it’s lost tens of millions of dollars.”
Then, she tossed out the b-word again: “Bankruptcy is not too strong a word. … We’re in a very serious situation here, and the decisions that are taken over the next little while are going to have a significant impact on what happens in Corner Brook.”
And, frankly, a very serious impact on a lot of people who do business with the mill.
Bankruptcy is an interesting issue. The media generally doesn’t report that a company is going bankrupt before the papers are actually filed, because the news tends to become a self-fulfilling prophecy, whatever the financial situation of the company involved.
When bankruptcy concerns make the news, lenders stop lending, suppliers start asking for payment up front and sometimes stop supplying materials at all. Suddenly, costs double: there are the payments that have already been invoiced, and the cash payments that suppliers suddenly want. That makes it very hard for a struggling venture to stay above water. Imagine what would happen if you had to pay all your credit card debt in a month and pay for all of that month’s costs in cash? It’s a squeeze that’s often fatal.
Because of that, perhaps everyone should tone down the rhetoric a bit.
Workers are going to be asked to make a very difficult decision about the mill near the end of this week. They will effectively be deciding their own futures.
They need good, solid information from the company and the government — open books and clear explanations — so they have the ability to make an honest decision. They don’t need fearmongering or hopeful boosterism from either side.
This would be a good time for politicians to stop shouting from the sidelines.