Tembec locked out workers in September during a contract dispute. ((CBC))

A group that had been looking into purchasing Tembec's newsprint mill in Pine Falls, Man., has dropped its bid for the idle plant.

"This is a difficult time for the former Tembec workers, their families and the buyout group who have worked so long to preserve the mill and the jobs that are critical to the town," Manitoba's Labour and Immigration Minister Jennifer Howard stated in a news release issued Monday.

"I commend the extensive efforts and diligence undertaken by the buyout group as it explored the financial viability of purchasing the mill from Tembec."

The mill has been idle since Sept. 1 when Tembec locked out about 250 workers during contract negotiations.

The Montreal-based company had been saying it needed a "significant reduction" in labour costs at the paper mill to keep it competitive as demand for newsprint has fallen.


Tembec's newsprint mill in Pine Falls was the community's largest employer. ((Google Street View))

When no deal could be reached with the workers, the company announced in December it would sell the operation, or permanently close it if it couldn't find a buyer.

In January , a former Tembec executive, J.P. Bradette, announced he was making a bid to buy the mill, about 130 kilometres northeast of Winnipeg.

He was hoping to convince the steelworkers to join him, promising to keep about 200 of the employees on the payroll. But the workers said Bradette's plan also calls for cutting production costs through wage cuts and layoffs. But the proposed cuts are too deep, said Cam Sokoloski, president of the United Steelworkers.

The employees then formed their own buyout committee but have decided to no longer pursue the bid, saying it is not a viable business for them.

Province to 'explore new economic possibilities'

Howard said the province "will continue to work with the people in the Powerview-Pine Falls region to explore new economic possibilities in the wake of the decision."

In December 2009, the Manitoba government committed $1 million to the Community Adjustment Committee to help the region adjust and to assist in finding new economic opportunities.

To date, this has resulted in 58 workers obtaining other employment, enrolling in educational upgrading, corrections and construction-related trades training, and pursuing self-employment options. Other workers have found new employment on their own, stated the news release from Howard.

"We will consult with the public, First Nations, municipalities and all stakeholders for input into the future of the forest resource in order to maximize the benefit in the region," she said.  "We will also explore opportunities for the region such as tourism development."

New training and job opportunities will also be available as a result of other stimulus projects, Howard said, but did not elaborate on what those projects would be.

"All workers receive ongoing job search assistance and support from a team dedicated to this purpose," Howard said.

"We will make sure these supports are available as long as they are needed."