MONTREAL - AbitibiBowater is inching closer towards an exit from creditor protection after some union workers in Quebec approved concession-filled tentative agreements and the newsprint giant moved to sell a B.C. wood and paper mill.
About 1,000 workers at three Quebec mills voted at least 85 per cent in favour this week of five-year collective agreements that included a 16 per cent reduction in wages and benefits.
Confederation of National Trade Union workers at a fourth mill, in Kenogami, have delayed their vote until the provincial government agrees to extend how long the company has to pay its unfunded pension liability.
Employees at Clermont, Alma and Grand-Mere, Que., accepted an agreement that reduces wages by about 10 per cent. Other concessions reduce benefits, vacation premiums and work rules.
Union president Sylvain Parent said workers faced yet another difficult choice to preserve the most jobs possible.
"While it was difficult to accept, employees were guided by their desire to help the company maintain operations in each plant and retain the same levels of employment," he said in an interview.
The company initially wanted to reduce costs by 30 per cent, Parent said.
Parent said about 200 workers at Kenogami agree with terms of the agreement but delayed their vote pending a resolution of the pension issue. The company is hoping to extend the number of years it can take to repay its $1.5-billion pension deficit.
Members of AbitibiBowater’s largest union aren’t expected to vote on their agreement for at least a week.
Communications, Energy and Paperworkers Union president David Coles suspects members will also give their reluctant nods but doubts support will be as strong.
"I think we’ll be okay because we were able to fix the (situation for) retirees," Coles said.
As it tries to reduce the cost of its operations, AbitibiBowater continues to unload idled assets.
It is seeking a Quebec court’s permission to sell its largely idled Mackenzie, B.C., wood and paper mills to a subsidiary of privately-held Conifex Inc. for an undisclosed price.
DTR Wood Acquisition Co. was the successful bidder for the two sawmills, two planer mills and a newsprint mill.
DTR initially didn’t want the newsprint assets and paper machines at all. But most were added to the deal because of complications in carving them out from the site, said a motion before Quebec’s Superior Court.
The purchaser then increased its offer for the assets, owned by AbitibiBowater subsidiary Abitibi Consolidated.
Officials of Fort St. James, B.C,-based Conifex couldn’t be reached for comment. Abitibi said it couldn’t comment because the matter was before the courts.
The deal is expected to close around April 30.
Coles said the sale is good news for the Mackenzie community that has been battered by the closure of most forest products facilities.
"It’s good for the Canadian industry and it’s particularly good for Northern British Columbia," he said.
He believes Conifex will operate the sawmills and the pulp power plant. However, the newsprint mill will remain closed because of its high cost of operation. Abitibi once employed more than 500 people at Mackenzie.
AbitibiBowater last fall unloaded its idled Belgo paper mill in Shawinigan to Recyclabe Arctic Beluga Inc.
It is also looking to sell three closed mills in Quebec. The mills in Roberval, Saint-Fulgence and Lebel-sur-Quevillon have been closed since last year.
The deal with DTR also includes several buildings, timber concessions, licences, lands, a steam power plant, raw materials including logs, lumber and four homes.
North America’s largest newsprint producer filed for court protection from creditors last April in Canada and the United States.
In addition to its large debt, the company has faced a collapse in newsprint demand caused by dwindling advertising and a structural shift to electronic media.
It operates 23 pulp and paper mills and 30 wood products operations in the United States, Canada, the United Kingdom and South Korea.
