Canadian Wood Products Magazine

From The Editor

Wednesday, March 10

MOVING FORWARD

Moving out of bankruptcy protection is in the works for both AbitibiBowater Inc. and Fraser Papers after the companies reached separate agreements with the Communications, Energy and Paperworkers (CEP) union.

AbitibiBowater, which has been operating under creditor protection since April 2009, reached an agreement with the union covering 8,000 workers. The union said two major issues had been resolved, including protection of the retiree pension plan and recognition of past service for active employees, which the company wanted to terminate. The unfunded liability for those plans was about $900 million noted union president Dave Coles. Union workers gave up some pay in return, but he didn’t give any details.

“This was a real historic situation for our union,” Coles said. “It’s not every day that you recommend to the membership that they take a step back to save a company.” The Quebec government has to adopt regulatory changes giving Abitibi more time than the current five-year period to pay for the unfunded pension liability, Coles said. “If the regulatory changes aren’t accepted by Quebec, they’ve got a whole bunch of closed smoke stacks because the company’s insolvent. That will be the end of that.”

At the Fraser Papers’ Edmundston mill, CEP members have voted 69.3 to ratify an agreement to change the pension plan and complete the conditions required for the company to restructure and emerge from bankruptcy protection.

"This was a very difficult decision for our members but it was the least of two evils," said CEP Atlantic Vice-President Ervan Cronk. "Bargaining into the wee hours of the morning, we were able to lessen the blow on pensioners and active employees," added Cronk.

The agreement at Fraser Papers will see an 8-year extension of Fraser's insolvent pension plan. Legislative changes by the New Brunswick government will also be required.