Corner Brook employees deciding on Kruger’s final offer
June 19, 2012 By Pulp & Paper Canada
Kruger Inc. left the bargaining table in Corner Brook without reaching an agreement with the unions, but the company has extended the deadline for a vote on its final proposal until June 22. All union locals at the mill have agreed to meet with…
Kruger Inc. left the bargaining table in Corner Brook without reaching an agreement with the unions, but the company has extended the deadline for a vote on its final proposal until June 22. All union locals at the mill have agreed to meet with their members to hold a vote on the company’s proposal, which Kruger says is modelled on the framework agreement of its main competitor.
According to Kruger, the future of the Corner Brook Mill is now in the hands of its employees. The company says it must settle labour issues so it can quickly resolve other pressing issues that will enable management to complete its assessment of the mill’s viability.
Kruger chairman Joseph Kruger made the gravity of the situation clear in a letter distributed to employees. According to Canadian Press, the letter states, “A vote against our proposal would be a vote against maintaining the mill.”
The letter describes the mill’s financial situation as fragile, reports Canadian Press, and says the mill has been profitable in five years and has defaulted on loan agreements since the last quarter of 2009.
Earlier this month, Newfoundland and Labrador’s natural resources minister also warned that Corner Brook Pulp and Paper is in dire financial shape.
According to a story on CBC.ca on June 8, Jerome Kennedy told reporters in St. John’s: “I can tell you, based on what we know, [that] Corner Brook and Pulp is on the verge of bankruptcy.”
He continued: “The liabilities are enormous, [and] we know there’s at least $80 million in unfunded pension liability, and there are monies owed to financial institutions.”
Kennedy did clarify that his remarks related only to the Corner Brook subsidiary, not Kruger Inc.
The Corner Brook mill is the last operational pulp and paper mill in the province.
Kruger Inc. is a major producer of publication papers, tissue, lumber and other wood products, corrugated cartons from recycled fibres, green and renewable energy and wines and spirits.
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