Abitibi, union strike deal to save Grand Falls-Windsor mill

The union that represents mill workers in Central Newfoundland said Wednesday it had reached a deal with Abitibi-Consolidated to save the company $10 million.

Abitibi-Consolidated announced earlier in 2007 it needed to reduce its operating budget by $10 million in order to make a profit duringthe year, and avoid drastic measures, such as closing the mill in Grand Falls-Windsor.

The company turned to the union to help come up with most of the savings.

Ron Smith, a spokesman for the Canadian Energy and Paperworkers union local that represents the mill workers, announced the deal with the company on Wednesday morning.

He said details of the deal between the company and the union would be released after both parties meet Wednesday night.

The company also cut grants it pays in lieu of taxes to three communities in Central Newfoundland where it owns property.

The town councils of Botwood, Bishop's Falls and Grand Falls learned recently that Abitibi intended to cut their grants by 40 per cent, in order to make the savings.

In 2006, Abitibi-Consolidated turned over $805,000 to the town council of Grand Falls-Windsor.

In 2007, the town has been told it will receive $480,000. The council met Tuesday night to discuss the blow to the town's finances.

Rex Barnes, the mayor of Grand Falls-Windsor, said he wasn't yet prepared to comment on how the town will cope with the 40 per cent reduction.