Thursday, April 29, 2010

‘All I heard is them bitching that we’re not making any money in Newfoundland'

How Abitibi was practically chased out of town

“The time has come for Abitibi to sell those two mills and get the hell out of here.”
— Max Michaud, Atlantic region vice-president for the Communications, Energy and Paperworkers’ union, representing Abitibi Consolidated employees, as quoted in the May 1-7, 2005 Independent newspaper.
Abitibi didn’t have to be told twice.

Only the company didn’t sell its Stephenville and Grand Falls-Windsor mills — it shut them down.


I wonder if the hundreds of former workers at both mills had their time back whether they would have went along with their union’s get-the-hell-out, bitch-slap attitude.

Probably not.

The union obviously underestimated the severity of the downturn in the paper-making industry and Abitibi’s urgency to cut costs.

“Give a chance to another player and it would be the best thing that could happen to the population of Newfoundland,” Michaud told The Independent in his thick French accent.

Only there was no other player.

The union was wrong.

Five years ago this week, in 2005, the situation in Newfoundland’s pulp and paper industry looked bleak.

But not nearly as bleak as it is today.

Following a 60-day review, Abitibi — which was losing tens of millions of dollars — announced on April 27th, 2005 that it would shut down one of two paper-making machines at the Grand Falls-Windsor mill.

At the time, Abitibi had 240 workers in Stephenville, 520 in Grand Falls-Windsor, and 420 woodsland workers.

The review called for the phase out of the No. 7 paper-making machine at Grand Falls-Windsor, and amalgamating the administration at the Stephenville and central Newfoundland mills, meaning layoffs to an untold number of workers.

In response to the threat to shut down the Grand Falls-Windsor paper machine, then-Natural Resources Minister Ed Byrne (this was obviously long before he went to jail for his part in the constituency allowance scandal) announced he would invoke Bill 27 — revoking the timber rights for 60 per cent of the wood supply for the Grand Falls-Windsor operation.

The only problem with that move was the Stephenville mill had no secure wood supply and imported up to 70 per cent of the wood fibre it needed to operate from offshore.

Then-Liberal Opposition Leader Roger Grimes also got into the debate, arguing in March 2005 that selling both mills could be an opportunity for the province.

“Other companies would find either Stephenville or Grand Falls-Windsor attractive. If Abitibi pulled out I’m convinced there would be buyers in the marketplace,” he said at the time.

Michaud agreed, saying it was time for the company to quit complaining and leave.

Which is what apparently happened in the 1980s when newsprint giant Bowater experienced financial trouble.

The company sold its Corner Brook mill to Kruger.

“We don’t hear any bitching from Kruger,” Michaud said in 2005.

(Although that's not the case today.)

“Abitibi since they’ve been here, since I can remember, all I heard is them bitching that we’re not making any money in Newfoundland.”

Five years later and the Stephenville mill has been torn down, the Grand Falls-Windsor mill is shut down, and hundreds and hundreds of workers have been laid off.

The average mill worker made $70,000 a year.

Which you can’t make growing cranberries.

The Corner Brook mill is still operating, but there have been dozens of layoffs, salaries have been cut, and one of its papermaking machines has been shut down.

The Danny Williams administration expropriated Abitibi’s water and timber rights, as well as a hydroelectric power station, after the company closed its Grand Falls-Windsor mill.

Only the Williams government made a “colossal error” in expropriating the century-old mill itself, and could be responsible for hundreds of millions of dollars in environmental cleanup costs.

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