You have to feel for the workers at the former NewPage paper mill in Port
Hawkesbury.
Last September, when the mill shut down and the company filed for
bankruptcy protection, the court-appointed monitor said he would work quickly to
find a new buyer. Now almost five months later, the workers and their families
are learning that in the world of bankruptcy and court proceedings, "quickly" is
a relative term.
Today, the more than 500 employees still have no idea if the plant will
re-open, and if it does, what price they will have to pay. That's because they
still haven't been told anything by the company chosen as the successful
bidder.
Pacific West Commerical Corp., is a subsidiary of Stern Partners Inc., a
Vancouver investment firm. Last year, when it was preparing its bid, company
president Ron Stern held a short meeting with the leadership of the union. His
message then - negotiating cheaper power rates would be his number one priority.
Any negotations with the union would have to wait.
They are still waiting.
The union can only assume that Stern, who has been described as a tough
negotiator, still hasn't reach a deal with Nova Scotia Power and the
province.
But they know even if Stern gets the power deal he's looking for, the union
and its members face a bleak future.
First, Stern has said he is only interested in operating the mill's
supercalendered machine, leaving the newsprint machine idle. That means, right
off the bat, anywhere from 200-300 jobs will be cut.
Then, there is the pension shortfall. The company's four pension plans are
underfunded by approximately $140 million dollars. If the plans are dissolved
the Superintendent of Pensions will sell off the assets and purchase annuities
for the retired and current employees. With the current state of the markets,
depending on which plan they are in, employees could see their pensions cut
anywhere from 25%-40%.
It is such a major issue, the union warns failing to find a solution to the
pension problem could kill any chance of negotiating a deal with the new owners.
The union is looking at two options. First, it wants Stern to keep the
current pension plans. The hope is, that with higher contributions, and an
eventual correction in the stock market, much of that liability can be erased
over time. At a time, when companies everywhere are reducing their pension
liabilities, that will be a tough sell.
The second option would be a one time infusion of cash. If for example,
Stern agreed to put $75 million into the plans before they are wound up,
employees and retirees would see their pensions cut by only about 15%.
The question is why would the new owner agree to either option?
The union says if Stern, or the province, refuse to move on the pension
issue, the workers may reject any new contract. Their argument is simple; almost
half the members will be losing their jobs and if the rest are asked to take a
wage freeze or cut, and still have their pensions decimated, they may decide
they have no option but to reject the contract and move out west to make big
money working in the oil sands.
If that sounds far-fetched, consider what happened at the Bowater Mersey
mill in Liverpool. Last fall, workers there were given a choice: cut 80 jobs,
and agree to a five year wage freeze, or the company would shut the mill
permanently. The vote was about as close as it gets, with only 51.7% voting to
keep the plant going.
So while getting a new power deal is occupying all of Stern's time right
now, when he finally gets around to talking to the union, he may find the
ultimate future of the plant is determined as much by pensions as power rates.
