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UPM makes major job cuts, earns indignation of Finnish foreign minister

UPM-Kymmene is making massive job cuts in order to boost profits. Roughly 3,600 people will be without employment o…

UPM-Kymmene is making massive job cuts in order to boost profits. Roughly 3,600 people will be without employment once the company fully implements its proposed program by the end of 2008.

The company is also toying with the idea of closing a coated magazine paper mill in Voikkaa, Finland, during the third quarter, in addition to potential closures and conversions in the Nordic country.

As a result of the closures, the company’s coated magazine paper capacity in Europe will shrink by 17%, while its coated fine paper capacity will constrict by 12%. The company has also confirmed its exodus from brown sack paper production altogether.

Plans for a paper machine with an annual capacity of 400,000 tonnes of supercalendered magazine paper, to be built in Germany or France, have also been put on the backburner.

Conversely, UPM has said it will be investing 370 million to boost efficiency at its Kymi pulp mill in the southeastern part of Finland, and will convert a machine that had been making coated magazine paper, to label-paper production, at its Jamsankoski mill in southern Finland.

According to a report by Newsroom Finland, not only the 3,600 people slated for layoffs are unhappy with UPM’s proposed measures. Erkki Tuomioja, the Finnish minister of foreign affairs, recently announced his intention to sell his shares in the company in a protest of UPM’s decision to cut so many jobs. “Considering drastic restructuring programs are being justified by making reference to shareholders’ demands for greater profits, I no longer wish to take part in supporting this way of doing business.”

The news service reported that Tuomioja owns more than 6,500 shares in the company.