Textile companies look at filing for bankruptcy
Two textile companies in northern New Brunswick have filed for protection from their creditors and are one step closer to bankruptcy.
Representatives from sister companies Atlantic Yarns and Atlantic Fine Yarns and a trustee met with the company's union Monday to talk about the future.
About365 employees work at the two textile mills in Atholville and Pokemouche.
Officials are blaming the Canadian dollar's surge against the U.S. greenback for the current difficulties competing in world markets, said Pat Roy, representative for the Communications, Energy and Paperworkers Union of Canada.
Employees have been told that the companies need to restructure, said Roy, who attended Monday's meetings, and that the businesses willtake 30 days to try to turn things around before people are laid off or the mills shut down.
Since opening in 1998, both companies have been heavily subsidized by provincial taxpayers.
Atlantic Yarns has received more than $37 million in the form of loans, forgivable loans and guarantees, said Sarah Ketcheson, spokesperson at Business New Brunswick. Atlantic Fine Yarns has received more than $41.5 million.
The most recent, $3.4-million loan was provided to the Atholville mill in April.
The companies are big employers in the north and the government support has helped keep jobs in the region, Ketcheson said.
"Ultimately we'd like to see the company survive and provide jobs," said Greg Byrne, minister responsible for Business New Brunswick.
The companies are struggling because of insufficient access to foreign markets, a situationthat could be improved by a pending trade agreement with Peru or Colombia, Byrne said.