Abitibi-Consolidated has instructed its mill in central Newfoundland to find ways to save $10 million per year in operating costs.

Public affairs director Denis Leclerc said local management and unionized workers at the Grand Falls-Windsor mill have been asked to come up with ideas on how to save the money.

Abitibi-Consolidated describes its Grand Falls-Windsor mill as one of its highest-cost operations.
(CBC)

"Don't underestimate the imagination of the people," Leclerc said.

"In other mills, they find new ways to cut costs. That's why they have a blank sheet to start with, and we're looking forward to read [and] hear what they are proposing."

Unionized workers at the mill met Friday to discuss their options.

"There's no appetite here for more layoffs. There just simply isn't," Ron Smith, national representative with the Communications, Energy and Paperworkers union, said after the meeting.

Smith said the three options are shutting down one of the mill's two papermaking machines, shutting the mill altogether, or modernizing the mill with one less machine.

Kathy Dunderdale, Newfoundland and Labrador's natural resources minister, met with Abitibi-Consolidated officials earlier this week, and reiterated a standing threat should the company close one of the two machines.

"We will strip the company of its timber licences if Abitibi closes its No. 7 machine," Dunderdale told CBC News.

Abitibi-Consolidated, which is aiming to trim costs at all of its mills, has not indicated a preference in cutting costs in Grand Falls-Windsor.

"Due to market conditions and new competitors' entries … we need really to find ways to make that mill cost-competitive," Leclerc said.

"This newsprint operation is one of the highest-cost [mills] in North America."

Abitibi-Consolidated, like most newsprint producers, has been battling a number of adverse factors for years, including oversupply, currency exchange problems and foreign competitors.

The company shut down its other mill in Newfoundland and Labrador, in Stephenville, in 2005.

It had previously considered shutting down one of the two papermaking machines at its Grand Falls-Windsor mill, but put those plans on the back burner when the Stephenville mill closed.

Leclerc said the company has asked for a response by early March.