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"Wake-up call" sparks strategy. (Iroquois Falls).

Iroquois Falls is where AbitibiConsolidated Inc. got its start back in 1912. It has become the world's largest manufacturer of newsprint, and Iroquois Falls is attempting to break free of its economic dependence on the company.

The town's municipal and business leaders have always known the community's future was tied to the fortunes of Abitibi, unless something was done to diversify the economy. During the 1990s, it became apparent the mill was becoming less important to the company and Iroquois Falls was facing an enduring downsizing of its major employer.

It was in the face of these harsh realities that a community development team was put in place in 1999 to address the problem, says Ken Graham, mayor of Iroquois Falls.

A development co-ordinator was hired, and the community for the first time was looking beyond what was happening with Abitibi-Consolidated.

Scores of citizens began working countless hours to diversify the economy and improve quality of life. It became a community-based approach with volunteer committees examining economic development opportunities with e-commerce, tourism and value-added forest products.

Two years after establishing the community development team, residents received a swift reminder of their vulnerability. Abitibi Consolidated announced it was shutting down an 86-year-old paper machine, throwing 200 highly paid employees out of work.

It is a familiar story for Northern Ontario where single-industry towns experience good times year after year and then are suddenly faced with devastatingly hard times.

The machine was the smallest in Abitibi's entire international operations. The company indicated it had an objective of removing 400,000 tonnes of newsprint capacity. It had already removed 200,000 tonnes.

At the time, there were about 550 employees working for Abitibi in Iroquois Falls, with an average wage of more than $50,000 per year. With half of the workforce losing their jobs, the region's economy was facing a loss of $10 million. It was also expected the town population would shrink from 5,500 to 3,500.

The company said its plans could be averted through a workforce reduction plan over three years, and major concessions that would eliminate the collective bargaining agreement from everything but wages and benefits.

After a couple of months of bargaining with the union representing workers at the mill, Abitibi agreed to keep the old specialtynewsprint machine operating. The agreement saw 40 jobs being eliminated immediately and another 75 eliminated over three years, mainly through retirement.

Graham says the news about Abitibi's plans was an additional "wake-up call for the community," and a reminder that economic diversification was needed now more than ever.

Since the fate of the paper machine has been decided, the community development team has been given breathing space and is moving ahead with a number of economic development and quality-of-life projects.
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Article Details
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Author:Lynch, Michael
Publication:Northern Ontario Business
Article Type:Brief Article
Geographic Code:1CANA
Date:Apr 1, 2002
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