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Another Kraft Pulp Mill Closure on the Horizon

Started by SwampDonkey, September 30, 2004, 01:49:28 AM

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SwampDonkey

UPM Kymmene announced yesterday that they are closing the 55 year old Kraft Pulp Mill in Mirimachi city. This means another 400 unionized workers will be out of work come January 31, 2005. The company says its no longer profitable and the union says its been one of its most profitable operations.

Click here for the story

cheers
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

Murf

Hmmm, let's see, the union says the company is closing one of their most profitable plants......  :D

MAYBE, their mistaken ????

I suspect that maybe the plant was profitable but that some new environmental regulations or something is going to mean extensive changes to the system would be required. As with most things, it's more expensive to renovate than build from scratch.

In this age of global competition I find it hard to believe ANY company would walk away from a penny of profit.

That doesn't make it any easier on the affected families.
If you're going to break a law..... make sure it's Murphy's Law.

Tom

I've seen that scenario take place here too.  Once Regionally owned mills being sold to off-shore organizations and then going under.  (sometimes several times before giving up)

One of the greatest deficits these mills had to overcome was labor.  I'd rather not get into  why but it is a sore point with me.

It's not always the lag behind technology that gets them since our local mills tried to stay as current as possible.  You can't stay on the Bleeding Edge and still make money in that kind of operation.  An upgrade means the plant must be closed and that is money spent as well as people layed off.

If there were a real reason that I can put my finger on, it is the search for labor.  It's apparently easier to ship logs than maintain a labor source/force in the North Americas.


slowzuki

Doesn't look good eh? Wonder how the Saint John mill is doing?

Murf

I was speaking with a friend here in TO this morning who married into the Irving family and runs one of their non-core businesses here.

He says there is a deal cooked between Irving, Canada Steamship Lines & UPM. The logs will be chipped here and put into CSL-owned & operated specially designed bulk carrier ships built by Irving shipyards.........

That sounds like a more likely reason to close a mill......
If you're going to break a law..... make sure it's Murphy's Law.

DanG

Lots of reasons for shutting down paper mills. The one near here was sitting on some VERY valuable development land. The paper company owned over a million acres in Florida's last coastal "frontier."  They wanted to develop the land, but nobody wanted to build a half-million dollar house and smell the paper mill all the time.  It wasn't that the mill wasn't making a profit, just that the profit wasn't obscene enough to suit them.  
Meanwhile, Ga. Pacific has built a huge OSB mill to process all the trees they're scalping off the land before they sell it. Maybe that ain't a bad trade-off with the high cost of construction materials. Pulp mills have taken a pretty good hit from all the recycling that's going on nowadays, too.
"I don't feel like an old man.  I feel like a young man who has something wrong with him."  Dick Cavett
"Beat not thy sword into a plowshare, rather beat the sword of thine enemy into a plowshare."

SwampDonkey

Merf:

Errm, first off I was only the messenger. The statement of profitability of the mill was made by the union. I don't know exactly who stated it, but if its Buzz Hargrove, well take it with a palm-ful of salt. :D

I agree with you Merf on most points. Such as upgrading expenses and environmental issues. And as you suggest they gotta ship the chips somewhere to be pulped and the papermill needs pulp. Lets face it a 55 year old pulp mill is OLD. Too bad though, this is the second Kraft pulp mill in New Brunswick to be closed or annnounced closure this month.

By the way they are both multinational companies. But at least UPM has shown more compassion than old Landeger.

Tom hit the nail on the head when he suggested these multinationals purchase mills from others and end up closing in the short term. The mill was owned by Repap, which was loaned $26 million back in 1993 to keep afloat and later went under. Repap had a brand new pulp mill (Skeena Cellulose) in Port Edward , near Prince Rupert, BC that was idle all the time I lived there (3 years). They had a sawmill operating in Terrace (Skeena Sawmills)...poof, where is Percy btw?. Repap bought out a License up along the Nass River in northern BC and went poof within a year. I don't know how they made out in their Smithers sawmill. We used to do road layout, harvest layout and cruising for them when I worked in BC.

cheers
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

slowzuki

I don't know much about the pulp industry but I graduated from high school where the first mill closed and I went to university with a bunch of people from the UPM mill area.

The Nackawic mill paid OBSCENE wages.  Nackawic was the highest paid per capita town in Canada, in one of the lowest cost of living places.  UPM paid very well too, engineering students were making 20+$/hr, unheard of in other local industry.

Average salary at St Anne was mentioned, wasn't it 50,000$ or something like that? 400 * the 65000$ it takes to pay an employee 50,000$ gives me 26 million a year in salary. 5 million a year could be saved knocking the average salary down 12000 on the plant side.

Why should the mill janitors make 22$/hr while the skidder operator makes 8$ an hour?

A friend of mines father ran maintenance duties on the lift trucks.  One night a company rep came in to see why they were having so many transmission failures, they heard this squealing noise for 20 mins or so and go to investigate.  There is a worker with the lift truck pinned against the wall WOT burning the tires.

Not allowed to fire him due to union.  People were stealing, drinking, doing drugs on the job, can't fire them due to union.

Something had to happen.

FiremanEd

Sure some here will disagree but unions are a major part of the problem in this country! And for our neighbors up north. As Slozuki asks, why should a janitor make 3X what a heavy equipment operator makes??? The guy putting lug nuts on for $30+ in auto plants drives me bananas!!  >:(
Full time Firefighter / Paramedic
WoodMizer LT300 as secondary, full time job.
AccuTrac Electric Edger

DanG

I just retired after 34 years as a union worker. I can say, without any reservations, that the Union owes me a whole lot more that I owe them. Our contracts were negotiated by our locally elected manager, and our locally elected Executive Board, with very little assistance from "International." The Union took a good little chunk out of each of my 884 paychecks and 90% of it went to "International."  For what? Nadda, as far as I can see. Now I've retired and having trouble getting my pawltry $910 per month pension checks. What does the Union say?  "You'll have to hire a lawyer. We can't do anything."  
Yeah, the Unions are a problem in this country, but not for the reasons you might think. >:(
"I don't feel like an old man.  I feel like a young man who has something wrong with him."  Dick Cavett
"Beat not thy sword into a plowshare, rather beat the sword of thine enemy into a plowshare."

slowzuki

DanG, I guess my kind of opinion on them here is they don't look after the average worker anymore.  They go out of their way to defend people who in all rights should be fired.  People stealing, showing up at work drunk, doing drugs at work etc are not the people you want representing your workforce.

Also no offense to the union guys but making the supervior drive 100 km from a weekend family dinner to move a freakin aluminum ladder blocking your work area because its outside your job description is  :o :o but it happend at Nackawic.

QuoteYeah, the Unions are a problem in this country, but not for the reasons you might think. >:(

SwampDonkey

I'm not totally against unions. I know there dues are high, which takes a large chunk of that change you want to bring home. They are good to fight for your rights to WCB benefits. If your a regular laborer you become a mouse inside a spinning wheel and get nowhere with compensation, while they make you do alot of things a doctor wouldn't prescribe in rehab and theoropy. I have a brother who went through it and in the end, after them tortoring and hurting him he told them off. And they cut him off except for a measly cheque for the pills, which are addictive. The people we pay to administer this are nothing but social workers, not doctors or trained theoropists.

But, as slozuki says, unions spawn a little corruption and the pay is disportionate with the local economy. I also find some errogance amongst the unionized workers to. At least some I know of, but not all of course. You'll also find the old adage: 'birds of a feather flock together' is also true. Funny how money influences us all eh? ;)

cheers
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

DanG

Slowzuki, we usually didn't worry about things so trivial, but the supervisor wouldn't have been allowed to move the ladder if we did. He would have had to call in a Union worker in the proper category, and paid him overtime for it. Whoever left the ladder there would have probably earned 3 days off without pay.

Frequently, we would go ahead and take care of a problem in another guy's area, then turn in a call-out chit for the guy, while he snoozed peacefully at home. :)

My problem is that groups of local workers aren't allowed to organize without the sanction of some group of thugs in Chicago. The thugs take the money and do nothing in return.

I think Unions are a necessary evil, but the system needs to be cleaned up.
"I don't feel like an old man.  I feel like a young man who has something wrong with him."  Dick Cavett
"Beat not thy sword into a plowshare, rather beat the sword of thine enemy into a plowshare."

Norm

If a person works hard they deserve a decent wage, but I've worked many different jobs that weren't union and got along just fine. If I thought I was being treated unfair I quit and went to work somewhere else as would most of the other good workers. Most times those kind of companies wouldn't last as they couldn't keep good help, ones that could would prosper. The last company that I worked for that treated it's help poorly kept losing money, I got tired of the bs and set up my own company to compete against them.

Ron Wenrich

I thought there were a couple of plants in the New England area where the employees bought the paper mills.  I think there was one in Maine.  I would be an option if the operation is profitable.

My dad worked for Bethlehem Steel.  He was big on unions.  The steel company is now gone, but the union isn't what ultimately do them in.  My dad always complained about how the management would keep on taking out profits, but wouldn't invest in new technology.  He was working with equipment made before WWI.

When Bethlehem Steel left our area, the employees bought the company.  It struggled, and survived.  Even without tariff protections.  It still offers a very good wage for the workers.

I think that labor should only accept lower wages when the top management of the company starts taking pay cuts.  We have one company that wants to cut everyone hired after 1999 by $4/hr.  The union says no.  Meanwhile, the CEO makes something like $70 million plus there is all those nice stock options that don't get figured in.  Maybe he should take a 25% pay cut first as an example.

I think there is room for give and take on all 3 sides - labor, mangement, and investors.  

If you pay peanuts, all you get to work for you is monkeys.
Never under estimate the power of stupid people in large groups.

slowzuki

I agree with management having to reflect changes to operations.  Why should they reap all the benifits while exposed to little risks.

Nackawic was paying diamonds and still had monkeys hanging around...

Really though they had some good guys but a lot of garbage was drug along too.  Makes it hard for the good guys to perform if the lazy guy on drugs next to him is paid the same.

Danny_S

Something that I have heard through the grapevine of stories about the Nackawic mill was that Landegger tried to make several changes to the operations there to save money but the union would'nt let him because it threatened job security. Several workers have been replaced by modernization but they were not placed anywhere else... They go into work not really knowing what they are there to do but they are still classed as a "thingamabob Operator" so they go in and play the part....  As I say, these are roumers that people hear but It wouldnt surprise me in the least that this has happened.

P.S... yes, I am still alive... ;)
Plasma cutting at Craig Manufacturing

Percy

QuoteTom hit the nail on the head when he suggested these multinationals purchase mills from others and end up closing in the short term. The mill was owned by Repap, which was loaned $26 million back in 1993 to keep afloat and later went under. Repap had a brand new pulp mill (Skeena Cellulose) in Port Edward , near Prince Rupert, BC that was idle all the time I lived there (3 years). They had a sawmill operating in Terrace (Skeena Sawmills)...poof, where is Percy btw?. Repap bought out a License up along the Nass River in northern BC and went poof within a year. I don't know how they made out in their Smithers sawmill. We used to do road layout, harvest layout and cruising for them when I worked in BC.

cheers
Heya S.D.
The thing(Skeena Cellulose) finally went into bankruptsy last week after all these years of goofin off. The Smithers mill was sold to West Frazer, acouple of years ago by Honest Dan Vienez. The bankruptsy thing went off with a ho-hum from the locals. The world is changing and this is one of the casualties, I think more are on the way..
Bummer ;D
GOLDEN RULE : The guy with the gold, makes the rules.

SwampDonkey

Hey Danny:

I had an uncle that help setup the mill in Nackawick. He wasn't on union though. He worked there for 25 years and was laid off with a number of others before retirement. Another thing Landeger did was to default on their pensions. Now a days if your gonna have something in the bank for retirement, you'de better well be saving it from those big pay cheques. Seems there is no law against a company not paying you your pension benefits that you contributed to for 25 years. ::)
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

Danny_S

Pretty soon the only people who will be able to recieve pensions are the people at the pension offices!!!
Plasma cutting at Craig Manufacturing

junkyard

Swamp Donkey

I went to a wormens comp hearing over an injury. The 'judge' never took his eyes off the pretty insurance lawyer. He asked me where my lawyer was said I didn't have one I understood one would be appointed . He said case adjurned don't come back without a lawyer i would be in contempt of court.Then he procede4d to make plans for dinner withthe insurance lawyer. By the way he wasn't a judge but a hearing officer. I got s$#@%.not even doctor bills.
                        Junkyaed
If it's free, It's for me. If for pay, leave it lay.

SwampDonkey

Smurfitt-Stone closed it's doors today in Bathurst New Brunswick. They employed 270 people. The mill made cardboard products.

http://nb.cbc.ca/regional/servlet/View?filename=nb-mill20050804
"No amount of belief makes something a fact." James Randi

1 Thessalonians 5:21

2020 Polaris Ranger 570 to forward firewood, Husqvarna 555 XT Pro, Stihl FS560 clearing saw and continuously thinning my ground, on the side. Grow them trees. (((o)))

sawguy21

Nice cozy arrangement between the Irvings, UPM and CSL, the latter being owned by our esteemed prime ministers family don't you think. That stinks along with the Skeena Cellulose fiasco. The provincial government poured millions into that money pit  to keep a cabinet ministers re-election chances alive.
old age and treachery will always overcome youth and enthusiasm

L. Wakefield

Quote from: Ron Wenrich on October 02, 2004, 05:31:50 AM

snip

When Bethlehem Steel left our area, the employees bought the company.  It struggled, and survived.  Even without tariff protections.  It still offers a very good wage for the workers.

snip

   I hadn't known that- it's very good news. For all that steelmaking is very toxic, I think it is an extreme skill (not to say art) that shouldn't be let go. Too many things you can make from it. I like local supply capability. My 2c  lw
L. Wakefield, owner and operator of the beastly truck Heretik, that refuses to stay between the lines when parking

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