AbitibiBowater closes 2 Que. plants
AbitibiBowater has permanently closed two idled Quebec paper mills that once employed 570 people.
The newsprint giant, which has been operating under bankruptcy-court protection from creditors for more than a year, said Tuesday the facilities in Dolbeau and Gatineau won't be part of its operations when it restructures this fall.
"It's part of our restructuring efforts and the idea is to give our creditors and the court the most precise portrait of what the company will look like after it emerges [from court protection]," spokesman Pierre Choquette said in an interview.
Production had ceased in Dolbeau in June 2009, affecting 240 workers, while 330 jobs were affected when the Gatineau mill was silenced in April.
Choquette said the Montreal-based company won't make any decision about selling or dismantling the sites until local studies about potential alternative uses are completed.
AbitibiBowater has provided some financial support to assist with the study in Gatineau.
"What we told the people in Gatineau is that we were willing to wait for the conclusions of that study before taking other decisions," Choquette said.
Used for scrap
Some other closed mills have been sold to a metal scrapper for dismantling after Abitibi said it could no longer use them for paper production.
AbitibiBowater filed for court protection from creditors in Canada and the United States since April 2009. It hopes to exit as a lower-cost producer in mid-October after reducing production capacity to match lower newsprint demand.
The union representing workers said it was "disappointed and distressed" by the company's decision to close the two Quebec sites.
Renaud Gagné, vice-president of the Communications, Energy and Paperworkers Union in Quebec, said the union understands that Abitibi has a financial incentive to make this move under the Companies' Creditors Arrangement Act because of how severance will be treated differently.
"But it's quite shocking for workers. They always pay the ultimate price because they won't receive some of the money they are owed," Gagné said in a release.
Earlier this week, AbitibiBowater CEO David Patterson urged employees who are owed money to approve the company's reorganization plans.
"This is a significant step forward in our restructuring process, and we remain on track to emerge in the fall a stronger, more sustainable company," he said in a letter.
Several groups, including the court-appointed monitor, have estimated that unsecured creditors, such as employees, would recover more of their claims than if it proceeds to liquidation.
"We have our sights set on building an organization with a leaner financial model, a low-cost and flexible operating platform and a diverse and innovative mix of products, capable of nimbly reacting to industry dynamics," Patterson said.