Monday, July 16, 2007

Kruger idles No. 4 machine 11

Kruger idles No. 4 machine 11
Company blames high loonie for two-week shutdown

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The Western Star

The economy of the region was dealt its second blow this week when Corner Brook Pulp and Paper announced Friday it was shutting down a paper machine.

In a terse and vague press release, Jean Majeau, Kruger’s vice-president of corporate affairs, said “one newsprint paper machine” at the Corner Brook facility and the super-calendared machine at the Wayagamack mill in Trois-Rivieres, Que. faced “production curtailments.”

The statement gave no time line on the shutdown, other than it begins July 22. It also said the two machines produce 145,000 tonnes of annually.

The three-paragraph release cited the high Canadian dollar as the reason. According to the Bank of Canada website, the loonie was trading at 95 cents US on Friday.

The announcement came the same week Lafarge Gypsum announced its Corner Brook plant was shutting down, taking 53 jobs with it.

Bruce Randell, president of the Communications Energy and Papermakers Union Local 242, said the shutdown of No. 4 will likely affect a total of 25 or 26 jobs, but he doesn’t expect the shutdown to be long-lived.

He said it’s expected that the machine will be back up and running within a couple of weeks, although he doesn’t have any official notice of the length of the shutdown.

He said the hardest hit group will likely be the students hired for the summer. He said senior staff will likely move their holidays to coincide with the down time and some may get some training, but the relief workers won’t be needed as badly with the peak vacation season used.

“If it’s going to be a two-week duration and they start up the machine again — which we assume they will — it’s not too bad,” said Randell.

“It’s the summer time and a lot of people have their holidays and spend some time with their families. If this is a long-term thing — which we don’t believe it is — obviously it’s going to be dramatic.”

As the 4 p.m. mill whistle sounded Friday, there were few smiling faces as employees headed home. There were many questions unanswered, and there was a feeling of concern among mill workers.

Tradesmen Rick White and Ross Edison said the rumours have been around for a long time, but that doesn’t help when the news comes down. They heard the closure is for two weeks, after which an assessment will be done.

“It’s been spoken of for the last couple of years that it was potentially going to be shut down, that one machine,” White said. “Apparently, it is supposed to be temporary.”

Edison said it appears Kruger is taking every measure to ensure as little work time as possible is lost.

“What they are asking the men to do now is for a percentage to come forward and take extra vacation during that period, so that nobody is affected with any layoffs,” he said. “They are saying that you can allow 30 per cent more guys off now on vacation for whoever wants to take it.”

Being tradesmen, they said they feel protected from the closure, but said the people in the labour pool will have less work. In particular, they said there will be fewer hours for those on call.

Economic impact

Mayor Charles Pender said it’s hard to guage how hard the area will be hit by the shutdown.

“Any shutdown of any machine for any length of time is going to have an effect on the economy and is a concern to us, no doubt,” Pender said.

“I’ve already had a chance to speak with somebody in government on this

“We met with Kruger twice over the last two months and they were impressing upon us the gravity of the situation, given the rising cost of the dollar, which is the major cause for this shutdown. I think more than half of the paper from the Corner Brook mill goes to the United States, so obviously it’s having a major impact on them.”

Tom Marshall, Finance minister and Tory legislature member for Humber East, said the industry as a whole needs to find a way to be competitive in a world with a pricey loonie. He said Corner Brook Pulp and Paper is coming up with innovative ways to save money, whether it’s burning peat in their boilers to save oil or setting up a co-generation plant.

“The market is terrible as we know,” Marshall said. “We saw the results of that with Abitibi (in Stephenville) and from the shutdown of plants in the rest of the country... We do know Kruger are smart operators and experienced operators. We’ve worked closely with them in terms of helping them on the energy side, on the silviculture side and the roads side. We’ll continue to work with them to ensure this operation is efficient and can compete in the global market even under challenging circumstances.”

Shawn Woodford, president of the Greater Corner Brook Board of Trade, said more questions than answers were raised by the news release.

“We’re certainly going to ask Kruger the details of what this actually means and what the impact will be,” he said. “We’re hoping it’s a temporary measure, and a short temporary measure to correct the market conditions that are being seen in the paper supply.

“After the news this week of Lafarge, something like this obviously is something I take quite seriously.”

Gerry Byrne, Liberal legislature member for Humber-St. Barbe-Baie Verte, said this business in particular has been innovative in trying to invest in cost-saving measures, but haven’t always received the support it needs.

He said the shutdown is evidence the manufacturing sector in the country is being let down, especially by the laissez-faire monetary policy of the federal government.

“I’m extremely concerned with this being the second shoe to drop in the manufacturing sector in Corner Brook in seven days, more announcements like this may follow,” Byrne said.

“The Harper administration has failed to do anything to assist the manufacturing sector in this country and the competitiveness challenges they faces as a result. They (federal Conservatives) have walked away from Canadian jobs.”

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