CORNER BROOK — As unions at Corner Brook Pulp and Paper get set to make the biggest decisions of their lives in the next day or two, their employer weighed in one more time Tuesday with an urgent call to accept the new labour contract left with them late last Friday night.
The mill's unions will begin voting today and have until Friday to decide on a collective agreement that even Joseph Kruger II himself has now confirmed will involve wage concessions.
Kruger, the one and only shareholder of the Corner Brook mill's parent company, sent letters to each and every mill worker this week and provided copies to the media Tuesday.
He told the workers that the future of the operation is in their hands and outlined the reasons why the company needs them to accept the offer.
The one union executive member who could be reached declined comment on the letter, as did Finance Minister Tom Marshall, in whose district the mill is situated.
Corner Brook Mayor Neville Greeley said the mill seems destined to be a different place if it does survive this ordeal.
"It's not going to continue as everybody knows it," said Greeley. "I think everybody realizes that."
The mill's access to fibre, cheap power and knowledgeable workforce can help it maintain a strong position in the industry if things can be worked out, he added.
"The difference as an employee, compared to an employer and owner, is the employer assumes all the risk and gets a great deal of the reward," said Greeley.
"But, when times are tough, the employer has all the skin in the game. In these kinds of times, how they resolve that kind of situation, as Mr. Kruger says, it's clearly in the hands of the employees."
Given the downturn in the newsprint industry globally, the high Canadian dollar and high operating costs, Kruger said the mill has been defaulting on its loan agreements since the last quarter of 2009.
"During the last 12 months, we have had to work relentlessly and negotiate with our lenders to avoid the irreversible damages that closing the mill would have caused to the Corner Brook community," wrote Kruger. "But CBPP has not turned any profit in half a decade and we have now reached a point where we will not be able to refinance the company unless we meet three essential conditions."
Those three conditions include ratification of the new collective agreement, granting the company funding relief measures to its pension plan and then submitting a sustainability plan to the company's lenders that shows the mill can be viable in the future.
Kruger acknowledged Corner Brook has a definite advantage in the industry with its own hydroelectric plant in Deer Lake, but that is offset by higher distribution and labour costs.
He also said the mill must improve its production efficiency and continue to invest in equipment improvements and maintenance.
The reality is, said the chief executive officer, that wage reductions must be part of the plan.
"You must realize that I resent having to ask employees to make this kind of sacrifice because it means that the situation of the mill is beyond critical," said Kruger.
Gerry Byrne, the Liberal Commons member for Humber-St. Barbe-Baie Verte who held a public meeting earlier this month to present independent evidence the company was not as bad off as it said it was, hoped any short-term pain workers accept will lead to long-term gains.
"At this point, there is really no value in engaging in any back and forth about the findings of independent, third-party data about the mill, especially since that was supplied to the provincial government and the parties involved some two months ago," said Byrne. "That ship has sailed."
He said even Kruger believes there is a future in Corner Brook if changes are made. Strengthening Corner Brook Pulp and Paper's place in the industry won't happen overnight and will take some time, said Byrne, even if a new contract is endorsed by the unions.
"I know I am joined by everyone in wishing and hoping that a decision can be made that will see the mill continue to operate and that workers feel that they are being treated as fairly as possible within the context of a difficult environment," said Byrne.
