Local mill will have to ‘wait-and-see’ about future

With news last week that AbitibiBowater is closing or idling more than half-a-dozen mills in Quebec, New Brunswick, Ontario, British Columbia, and Texas, regional manager Doug Murray said it’s hard to say right now what the future holds for the one here in Fort Frances.
“I guess the safest thing to say is the future will unfold as it unfolds,” Murray said Tuesday. “At this point in time, everybody has to look at all their divisions and see what they’re doing and go from there.
“Remember, there’s part two of this—further reviews,” he noted.
“I’m not saying we’re being reviewed, but I think the company is going through and looking at all its divisions and what’s going on at all its operations, and saying, ‘Hey, we’ve got a problem here, or there, or some other province.’
“And they’re going to say, ‘What are we going to do with this? Is there a fibre issue, an energy issue, a tax issue?’ If we can’t find a solution, this isn’t going to work so well for us.
“Like I say, it’s kind of a wait-and-see kind of thing to see what shakes out,” Murray added.
While an $84.3-million biomass boiler is being built at the mill here, Murray refused to comment on whether he felt the project was any measure of security against future job cuts locally.
But he did stress energy costs is just one of the problems facing the forestry industry.
“The big concern is our Canadian dollar,” Murray said. “Although it’s falling today [Tuesday] and we’re back down below par, it has been on a rapid escalation that you can’t compensate for overnight.
“That’s a huge impact.
“And for us here, with the biomass boiler, when it gets going and all that, it’s going to help us on the energy side, but we’ll still have concerns,” he added.
“Fibre is still a concern, and the Canadian dollar, and energy from the point-of-view that we still have to move our paper to market.
“If gas goes to $1.50 a litre or whatever, that’s going to hinder people that are further away from the markets than those that are right next door,” Murray explained.
“You have to get the wood to the mill and the product to the customer.”
As first noted in Friday’s Daily Bulletin, the company said a second wave of closures are possible in the second quarter of 2008 if governments, unions, and communities don’t assist in reducing energy, labour, fibre, and other costs.
“Over the next three months, the company will also be conducting an in-depth review of its wood products business with the objective of selling non-core assets, consolidating facilities where appropriate, and curtailing or closing non-contributing operations,” AbitibiBowater chairman John Weaver was quoted as saying in the Canadian Press story.
It also said AbitibiBowater wants to re-open its labour contracts as part of the cost-cutting efforts. Company officials said they have had preliminary discussions with union officials—and are hopeful they will co-operate.
But Murray said he hasn’t any heard any more about this other than what’s been in the media. “All I’ve seen is what you’ve read,” he noted.
As reported in yesterday’s Daily Bulletin, about 100 unionized paperworkers were to meet in Montreal today and tomorrow to develop a co-ordinated plan of action following AbitibiBowater’s mill closures and plans to re-open negotiated collective agreements.
CEP has organized the Dec. 5-6 meeting, at the Delta Hotel in Montreal, to bring together 35 CEP AbitibiBowater locals from 17 Canadian pulp and paper mills into a single caucus after the merger of Abitibi and Bowater’s operations was completed last month.
The more than 1,000 victims in the mills at Dalhousie, N.B., Shawinigan and Donnacona, Que., and Mackenzie, B.C. bring job losses in the forestry sector to more than 20,000 in the past two-three years, said Dave Coles, president of the 150,000-member CEP.
Among other things, the union will convene an emergency summit of union and industry leaders in the forestry sector to deal with what it calls “the biggest single jobs crisis ever faced in one sector.”
AbitibiBowater’s management warned earlier this month that it would be moving quickly to reduce debt by $1 billion over three years and to reduce annual costs by more than the original $250-million, two-year target given when the merger was announced.
Last Thursday, the company said there will be permanent closures in Shawinigan, Que., affecting 513 workers; Dalhousie, N.B. (278 workers at mill and 52 at woodlands), and at the previously-idled mill at Thunder Bay, Ont. and the No. 3 paper machine at a mill in Gatineau, Que.
In Lufkin, Tex., 450 workers already have been idled.
In addition, the company will idle indefinitely paper mills in Donnacona, Que. (206 employees) and Mackenzie, B.C. (235 employees), as well as two sawmills supporting the latter mill that employ 337 other workers.
None of the facilities to be closed are generating cash, analysts were told.