Message of hope, direction needed

The formal announcement was found on the front page of Saturday’s Globe and Mail: AbitibiBowater was granted bankruptcy protection in both the District of Delaware and the province of Quebec.
Bankruptcy laws in both the United States and Canada allow companies to continue to operate while negotiating with their creditors under court supervision.
Under the circumstances, this is good news for Fort Frances. The mill here should keep running and be able to fill orders to maintain Abitibi’s customer base (already other predatory paper companies are calling customers offering to supply them with products).
Today, Abitibi is the eighth-largest publicly-traded pulp and paper company in the world. Their stock has been delisted from the New York Stock Exchange and will be delisted from the Toronto Stock Exchange in the next few weeks.
Fort Frances offers many advantages in the paper industry. It produces paper for books, which are growing in popularity throughout North America. Books are bucking the trend and their sales have increased even in the recession.
Libraries are finding greater usage of their facilities, their services, and their books in 2009.
The Fort Frances mill has a strong, highly-skilled workforce which produces a paper product recognized for its consistent high quality and printability throughout North America. The paper machines are smaller, and that makes them faster for the paper makers to change grades and colour for their customers.
In today’s marketplace, that flexibility is valuable in picking up orders.
In Canada, under the Companies’ Creditors Arrangement Act, the legislation allows companies to work out arrangements with the creditors it owes. Under the act, creditors and suppliers who are owed money are not allowed to take any actions to collect it.
Reaching a decision amongst all creditors is crucial since all have a part in determining the outcome and how they will be paid. Secured creditors are paid first; unsecured creditors are looked after secondly.
The process of reaching agreements can take months—even years.
That may put a significant financial strain on businesses across Rainy River District. It will be important for company officials to meet with them quickly to begin the process of payments and guaranteeing of payments for services and materials it will require to operate while remaining in bankruptcy protection.
Shareholders are looked after last. In most cases, the money they have invested is lost.
Everyone in the community will be part of this reorganization. In the United States, the courts are enabled to rewrite labour contracts. In Canada, they can’t, yet the unions of the mill and retirees may be asked for concessions.
It may not be popular, but today it may be the new reality.
Premier Dalton McGuinty made it quite clear to Ontario publishers on Friday afternoon that the provincial government could not guarantee the pensions of auto workers nor any other sector in Ontario.
The voluntary insurance paid by employers has never grown enough to cover the economic collapse of 2008, and the province simply cannot raise the money that will be necessary.
Citizens and businesses of the district will be looking for a clear message from local management.
That message should offer hope and direction as to what the community and district can do to assist in protecting jobs and encouraging the long-term viability of the mill at Fort Frances.

Posted in Uncategorized