Union accepts Kruger bid to salvage Corner Brook mill

Unionized papermakers at a troubled newsprint mill in western Newfoundland on Friday night gave a reprieve to Montreal-based Kruger Inc., while accepting an unspecified pay cut.

Four of the five locals of the Communications, Energy and Paperworkers Union agreed to a concessionary offer that Kruger said is essential for keeping Corner Brook Pulp and Paper afloat amid a global slump in demand for newspapers.

"It's a tough contract, but we are tough people, so we'll manage," said Gary Healey, a national representative with the CEP. 

Kruger said in a statement issued soon after the results were announced late Friday night that the new contract is effective immediately. 

A CEP local representing 17 electricians held out and turned down the offer, saying it will try to return to the bargaining table for a better offer.

The CEP had until Friday at midnight to tell Kruger whether or not it would accept an offer that even the company said was unfortunate, but necessary, to help ensure the mill's survival.

"Essentially, the fate of the mill is now in your hands," chairman Joseph Kruger said in a letter that also revealed that Corner Brook Pulp and Paper has been defaulting on loan agreements since 2009.

Kruger is also asking its employees to accept a restructuring plan that would give the company an extra five years to pay back millions of dollars owed to employee pensions. That vote will happen by Aug. 22. CEP members rejected the request earlier this spring.

About 600 people rely on Corner Brook Pulp and Paper for work, with the CEP representing more than half of them.

Earlier this week, the International Association of Machinists and Aerospace Workers, which represents a few dozen machinists and skilled trades workers, turned down the Kruger offer, saying it will only prompt its members to migrate to other employers across North America.

Kruger says it is willing to consider the machinists' rejection of the offer.

Corner Brook Pulp and Paper is a key employer in the area, as well as the last of three newsprint mills that once powered Newfoundland and Labrador's forestry sector. AbitibiBowater closed its mills in Stephenville and Grand Falls-Windsor in 2005 and 2009, respectively.

'A serious day,' Dunderdale says

Newfoundland and Labrador Premier Kathy Dunderdale flew to Corner Brook to provide moral support for a community that has been torn between accepting wage cuts and possibly losing an industry that helped found the city in the 1920s.

"It's a serious day in Corner Brook and the region and the province, really, so we are all taking it very seriously," said Dunderdale.

"[I am] certainly more comfortable here with the people than I would have been pacing around my office waiting for the phone to ring."

While Dunderdale has been concerned about the fate of the mill, she has ruled out direct subsidies to ease Kruger's operating expenses.