Americans leaving Canada: it's a bad thing; Major U.S. companies with operations in Northern Ontario are moving to South America where labour is cheap and trees grow faster.Manufacturing jobs in the forest sector are heading to South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. where wages are lower, the trees grow quicker and regulations are more lax.
Terrace Bay's Neenah pulp mill A pulp mill is a manufacturing facility that converts wood chips or other plant fiber source into a thick fiber board which can be shipped to a paper mill for further processing. is scheduled to shut down if Buchanan Group cannot reach a resolution with its woodland unions.
Fort James sold the Marathon Pulp Mill to Tembec and in Prince Albert, Saskatchewan Prince Albert is the third-largest city in Saskatchewan, Canada. It is situated in the centre of the province on the banks along the North Saskatchewan River. The city is known as the "Gateway to the North" because it is the last major centre along the route to the resources of , Weyerhauser's pulp and paper mill closed down operations completely last December.
"The Americans are leaving Canada and I don't think we get it," Buchanan Forest Products' CFO See Chief Financial Officer. Russell York says.
Canada now Canada Now (more formally CBC News: Canada Now) is the early-evening national news program aired on CBC Television, the main English television network of the Canadian Broadcasting Corporation, between 2000 and 2007. has to decide whether to pick up the pieces and start again by creating new opportunities from abandoned plants or be left without an industry of high paying jobs, he says.
Buchanan has purchased dilapidated mills before. They have fixed them up, solved the internal challenges and began making a profit. The same can happen in Terrace Bay, but everyone has to have buy-in.
York says the company is still working through the issues of financing, transferring timber licenses and negotiating with the woodland's union.
The union went on strike last January when Neenah Paper Inc. wanted to reduce wages and benefits to curb operating expenses Operating expenses
The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Kimberley Clark of Canada (KC), the previous owner, spun it off to Neenah when management realized the plant could not afford to run in a cost-effective manner, York says.
Over the years, the Years, The
the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109]
See : Time mill provided employees with defined benefit pension plans, something other woodland operators in the industry do not have. KC gave into employee demands to meet market demands.
Now "Terrace Bay is in the highest cost quartile Quartile
A statistical term describing a division of observations into four defined intervals based upon the values of the data and how they compare to the entire set of observations.
Each quartile contains 25% of the total observations. ," according to a Price WaterhouseCoopers report, York says.
But Buchanan has an expansion plan that would allow Terrace Bay to become self-sufficient in three years and another plan to reduce wood costs.
"You add those two items up and we can go to the bank and the provincial government can obtain financing for this major capital expansion. This is what we are trying to do, yet there are certain people who are not prepared to do their bit."
When Buchanan announced it would purchase the mill, the woodland union workers refused to accept pay, benefit or pension adjustments.
Buchanan received an extension from Neenah to come to some resolution with the union, but the clock is ticking.
"At some point we have to decide what our options are," York says.
"If they don't understand the situation today, how are they going to understand down the road?"
Previous owners were asked to make energy infrastructure investments. They declined, yet Buchanan is prepared to reinvest into the plant with some of the funds from the softwood tariffs.
"We can solve the problem; we have a solution. That plant has been viable (before) but people over the years have been spoiled and the people know it. Ninety per cent of something is better than 100 per cent of nothing."
He says the bottom line is "you gotta change, guys."
One need not look any further than Kenora to see the consequences of opposing change.
There, the same union had the same issue with Abitibi Consolidated. The company had a recovery plan, and the employees voted it down. Abitibi closed the plant.
"Make you choice."
By KELLY LOUISEIZE
Northern Ontario Business Northern Ontario Business is a Canadian magazine, which publishes monthly in Greater Sudbury, Ontario. The magazine covers business news and issues in Northern Ontario.