Friday, June 15, 2012

NOVA SCOTIA MILL CLOSURE PROVES GOVERNMENT NEEDS TO BE PROACTIVE

Natural Resources Minister Jerome Kennedy told the public last week that Corner Brook Pulp and Paper is precariously close to bankruptcy.

The warning was aimed at unionized workers who have so far rejected further compromises on the their pensions that would allow the companies paper machines to keep on rolling. The family company does not want to share it's books with the workers. It is demanding, with government pressure, that the members re-think their previous vote or they will close the mill.

The ultimatum, backed by the government's anti-union rhetoric in the House of Assembly leaves the workers with the weight of the City of Corner Brook's industrial future on their shoulders. NDP Leader Lorraine Micheal has tried to alleviate that weight by asking government to ensure the pensions will be protected if the company does not survive the current crisis. This would certainly allow the workers to put the mill ahead of their future pensions.

The volatility of the industry was reinforced today when Bowater-Mersey announced that the mill in Brooklyn, NS,  will be idled starting on Sunday because it is unable to compete as prices decline in export markets.

In December, Premier Darrell Dexter announced a $25-million forgivable loan to the firm in $5-million yearly portions.

If I were worried about my long term pension, the closure of the Nova Scotia Mill would be playing on my mind.

Government needs to get out of the shadows. Stop making secret overtures and feeding the intimidation/rumor mill be offering the workers a lifeline that protects their pensions. A refusal to to so is asking too much of a small group of individuals that have worked hard for a retirement that could be lost.

8 comments:

Wm. Murphy said...

Not quite sure if the gov't needs to get out of the shadows but for the record our gov't has provided over 42 million since 2006. If memory serves I think that's two Sprungs!!

It's time for gov't to put away the Kruger cheque book

Cyril Rogers said...

This mill closure is inevitable, given the current world economic situation, the high value of the Canadian dollar, and our mortgaging the future by selling our commodities, without secondary processing, to keep the dollar high.

Mulcair is essentially correct in that Alberta oil is driving the higher dollar, and Corner Brook would certainly be more competitive if the dollar were ten to fifteen per cent lower. Whether or not it would solve the long term shift to cheaper fibre elsewhere is debatable. Any resolution to these problems in the short term will not keep the mill open long term, especially in a highly competitive, and essentially unfair, global market environment. How can we compete with cheap, some would say, slave wages in other countries who don't play fairly.

The rush to globalization in commerce will result in major casualties and the established economies are most at risk. Unfettered capitalism always shifts and concentrates wealth and, right now, we have a narrow minded federal government that is willing to reduce average people to poverty at the expense of the corporations. As Mr, Flaherty says, there is no such thing as a bad job!

Don't forget that the government is also desperate to build Muskrat Falls and the closure of the Coner Brook mill would blow its projections out of the water! While I certainly don't want to see the mill close, I am steadfastly opposed to this hare-brained scheme that is Muskrat Falls. The government, I would expect, will sink additional money into the mill, whether warranted or not, simply to keep its big project going! On the other hand, the workers at the mill, and the residents of Corner Brook, deserve every consideration but I am not so sure about the mill ownership.

Anonymous said...

Government needs to be proactive allright. they need to cease pouring money into this unprofitable organization and prepare to transition the workers and community to life without the mill. Throwing more money at this operation will only delay the inevitable and cost us more.

Peter L. Whittle said...

"This mill closure is inevitable" As I have stated, over and over.

If a mill with the resources and energy available to Kruger can not make it, than the closure is inevitable.

Cyril, I know this industry only too well. I have been at the boardroom table with Kruger and Abitibi. What you say is correct, I certainly do not see pouring money into an unprofitable mill, unless there is a hope of return. Not a dream.

If the government truly believes that the closure is not inevitable, than they need to show it by offering the workers some pension protection rather than blacklisting them into a corner. The pressure is not fair. If I were a union member, with the storm clouds on the horizon and no guarantees that the company will be around to honor the "borrowing" of pension funds from an already underfunded pension, I would be thinking of me future first.

The gov should offer to underwrite the pensions using Deer Lake Power as the collateral. A loan guarantee is just that, a guarantee. It will take the risk off the table for the pensioners, ensuring the mill can continue to operate. If Krugar pulls through no money needs to be expended.

Seems like a pragmatic solution that keeps that protects the taxpayer, shelters the employees future pensions and makes Kruger show a financial commitment.

Cyril Rogers said...

Peter, if the Deer Lake power plant is used as collateral, and comes to us with no charge in the event of a closure, I'd have no problem with that. If the government is going to intervene, it should be for the benefit of the workers and the people of Corner Brook. We owe Kruger nothing, as far as I am concerned, since these corporate giants will walk away from communities, if it is in the best interests of the corporation.

Yes, I realize corporations are in business to make money but their contractual obligations to the pension fund were made with their eyes wide open. In my view, if you agree to a pension plan for employees, there should never be unfunded liabilities.

Peter L. Whittle said...

Cyril,

that is exactly my train of thought. We owe them nothing, they owe the workers a pension....if the gov is so confident in the company, they should make sure the workers are protected and are not going to piss away more of their pension.

Anonymous said...

Peter your full of it! When did you ever sit in a board room with Joe Krugar? What do you know about the pulp and paper industry in St. John's?

Anonymous said...

Unions are the big problem. Interesting to see come the 22nd....