08) MILL CLOSURE CLOUDS CORNER BROOK'S FUTURE
By Sean Burton
The last month has been a tense and angry one for workers at Corner Brook Pulp and Paper. It was revealed in May that Kruger, the Montreal‑based owner of the mill, was planning another cost‑cutting measure in the area of pension payments.
Kruger has repeatedly justified its cost‑cutting on the grounds that the present‑day newsprint industry is on the verge of collapse. Although it is certainly true that newsprint demand has declined somewhat in recent years, it is still a very widely used product around the world.
But for profit‑driven corporations, paying more for energy and shipping costs while still paying good wages and benefits to unionized workers is naturally quite unappealing. Abitibi‑Bowater, which operated paper mills in Stephenville and Grand Falls‑Windsor, gave up entirely and shut down its operations in Newfoundland and Labrador within the last decade. Clearly that was an ominous signal to the mill in Corner Brook, one of the very few industrial centers outside of the St. John's area.
The recent anger over the pension restructuring has developed into a full‑blown discussion of the mill's viability in the eyes of Kruger. Unionized workers at the mill rejected the plan, sparking talks between Kruger and the provincial government. CEO Joseph Kruger himself travelled to St. John's to meet with Premier Kathy Dunderdale. Following the meeting, Dunderdale echoed earlier comments from Natural Resources Minister Jerome Kennedy to the effect that the mill was in a "grave situation" and the government would not get itself involved in the dispute beyond a vague suggestion of helping to maintain the mill's sustainability in the future.
Realistically, Kruger and the government have very much been defining the situation in all‑or‑nothing terms. Minister Kennedy argued that the mill is on the verge of bankruptcy and would likely shut down if the workers do not accept the proposal. Kruger has also stirred the pot by writing a two‑page letter to the mill workers insisting that wage‑reductions are necessary for the company to remain competitive. The fate of the mill was solely in the workers' hands, he says, and a vote against the plan was a vote against the mill itself. Evidently the notion of using some of his own billion‑dollar fortune to pitch in did not occur to Kruger, nor even the idea of further investment from the main company's coffers.
There is also conflict within the union on how to handle the proposal. National officials of the Communications, Energy, and Paperworks (CEP) union have been encouraging acceptance of the deal from the beginning, describing it as the lesser evil. Many local workers have not heeded this advice, and are fed up with the company and concessions.
This resilience is actually somewhat useful to Kruger: along with its all‑or‑nothing demands, Kruger is trying to force the union to bear responsibility for whatever happens next. It is undeniably a cheap tactic to blame the union and the workers, but some people are liable to fall for it.
The outcome of the situation will not be known until late June. But is it not pathetic that after so many years we are speaking of "lesser evils" and "determining fate"? Corner Brook may have developed as a factory town, but there was no reason it had to be so dependent on a single industry and the whims of its corporate masters.
The smaller plants in the city opened in the post-confederation years are gone, and diversification has been small-scale at best. Companies in St. John's are awash with oil money, but the rest of the province seems stagnant or in decline. Economic planning is central, but such planning must be done by and for the working people, not at the hands of profit mongers and their cronies in government.
Under present circumstances, Corner Brook may very well end up as a retirement town supported mainly by big retail chains. These days, it is not far off from that even with the mill.
UPDATE, June 22: Machinists and a number of other skilled workers rejected the plan, but the majority of CEP locals have endorsed it. The new contract will take effect immediately although the nature of the wage cut is not yet known. The union will vote again in August regarding the pension changes. However, Kruger has stated that even if everything is accepted by the union, it will continue to assess the mill's viability.
(The above article is from the July 1-31, 2012, issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $30/year, or $15 low income rate; for U.S. readers - $45 US per year; other overseas readers - $45 US or $50 CDN per year. Send to People's Voice, c/o PV Business Manager, 706 Clark Drive, Vancouver, BC, V5L 3J1.)