Kruger reassessing Corner Brook mill after employees reject pension changes

CORNER BROOK, N.L. – Kruger Inc. is reassessing the viability of its Corner Brook pulp and paper operations after its unionized employees rejected proposed changes related to their pension plan.

The Montreal-based company had been seeking to repay a deficit in the plan over 10 years instead of the normal period of five years.

“The relief measures were a crucial element in the mill’s strategy to improve its competitiveness and secure its future,” Kruger said in a statement Friday.

The pension change could be blocked if there were objections from more than one-third of the members of any of four distinct groups – made up of active and retired members of the pension plans for unionized and non-unionized workers.

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Kruger said 54.3 per cent of active unionized employees opposed the change, while the other three groups accepted it.

Union spokesman Gary Healey said some union members were concerned about the clarity of the agreement and suggested a second vote may be possible.

“We are still committed to the process. It is important to the union. It is important to the community that the future of the mill be secure,” Healy said, adding that the union was ready to meet with the company.

“Some of the people that we spoke to felt that the information that was provided didn’t lend enough clarity, so they were reluctant to agree. So that’s an issue we need to work on.”

Corner Brook Pulp and Paper is the last paper mill to continue operating in Newfoundland after a series of shutdowns in other communities in recent years.

Newfoundland and Labrador Natural Resources Minister Jerome Kennedy said the government was disappointed and concerned by the rejection by the union members.

“We are facing a grave situation, one which could potentially lead to the closure of Corner Brook Pulp and Paper Ltd.,” Kennedy said.

“We strongly urge the unions at Corner Brook Pulp and Paper to work with Kruger to help secure the long-term competitiveness and future viability of the mill.”

The forest industry has been battered by declining demand for paper, the crash of the U.S. housing market and the rise of the Canadian dollar.

In February, the company said it would eliminate 46 positions to reduce labour costs.