Offer to union at idled Cape Breton paper mill would cut workforce in half

PORT HAWKESBURY, N.S. – The union representing employees at an idled Cape Breton paper mill says the final offer from a potential British Columbia buyer would lay off about half of its workforce.

Archie MacLachlan, a vice-president with the Communications, Energy and Paperworkers union Local 972, says an offer for workers at the NewPage Port Hawkesbury paper mill was made public Thursday by the Pacific West Commercial Corp. on a company website.

The 10-year contract proposes to rehire 229 of the 550 workers who have been out of work since the mill shut down in September, and divide employees into six groups, with categories ranging from clerical to operations workers.

MacLachlan said 80 per cent of the hiring in each group would be based on seniority and the remaining 20 per cent would be at the discretion of the owners.

The company’s pension plan would be discontinued and replaced with a new defined contribution plan, with matching contributions from the company of five per cent of wages.

The company’s website says that the proposed collective agreement, “preserves basically the same wage levels as were in place before,” and it includes $12 million earmarked for severances for eligible employees and for contributions to retiree benefits.

MacLachlan presented the 54-page document to several hundred workers at a meeting at the Port Hawkesbury fire hall.

“It wasn’t your normal reaction. They seemed very quiet, almost in shock,” he said, in a telephone interview following the meeting.

He said another meeting will be held on Saturday.

MacLachlan said the executive will seek direction from the membership on whether Stern’s offer should be voted on or refused.

He said the union executive wasn’t making any recommendation on the offer at this point, but will take its direction from members on how to proceed.

Ron Stern, president of Stern Partners, the parent company of Pacific West Commercial, was unavailable for comment.

The company’s website includes a letter to families, workers and the residents of Port Hawkesbury.

“We cannot restart the mill unless we can be assured the mill is efficient and competitive in an industry that is facing a shrinking demand for paper,” says Stern’s letter.

“We need to re-think the way things are done.”

MacLachlan said the union has been told this is Stern’s final offer.

“If we say, ‘No’, he is saying, ‘I’m walking away,'” MacLachlan said.

The mill’s shutdown has also affected about 400 people who work for forestry contractors that supply the mill.

The Ohio-based parent company said it was forced to halt operations because it was losing $4 million a month as it struggled with soaring electricity and shipping costs, a strong Canadian dollar and declining demand.

The provincial government has already spent millions of dollars into keeping the mill in a so-called hot idle state — meaning it could be quickly restarted — and supporting forestry operators as the sale negotiations proceeded.

A month ago, Premier Darrell Dexter said a $15-million fund originally announced last September would be doubled and extended until the end of this September.

The mill is under creditor protection until the end of May.

— By Michael Tutton in Halifax