Tembec aims to sell Pine Falls plant

Workers at forestry company Tembec Inc.'s newsprint mill in Pine Falls, Man., are expressing relief over newsthe mill is up for sale.

The mill has been idle in a labour dispute since Sept. 1 when the Montreal-based company locked out its unionized staff, represented by the United Steelworkers.

TembecsaidTuesday it's in the best interest of the company and its more than 250 employees to sell the mill.

That comes as a relief to Mike Dupont, a finishing and shipping supervisor, who has worked at the plant for 21 years.

The biggest problem workers had with the lockout was living under a cloud of uncertainty, Dupont said.

"Sell it to someone who maybe wants to run this place and get us back to work and do what we do best," he said. "That's what I'm very hopeful for."

Agreement needed

Tembec said Tuesdayit has told the Manitoba government and the United Steelworkers union it's prepared to end thelockout now, subject toan agreement on some local issues.

However, the company said an end to the lockout will still not lead to Tembecreopening the mill, an important employer in Pine Falls,about 130 kilometres northeast of Winnipeg.

Union officialssaidthey hadn't seen Tembec's proposal for ending the lockout and didn't want to speculate on what it might contain.

Prior to closing, the company had said it needed "an immediate and significant reduction" in labour costs to stay competitive in the newsprint market.

On Tuesday, John Valley, executive vice-president ofbusiness development at Tembec, said the firmwas hoping the Pine Falls operationwould survivean industry-wide downturn, but the flagging economic climate forced the company's hand.

"Demand for newsprint fallen over 50 per cent since 2003 It's clear there is a supply-demand imbalance and there's going tobe additional mill closures across the country," Valley said.

"What we were endeavouring to do was establish a position of cost-competitiveness for the Pine Falls mill that would allow it to be one of the survivors. We were unable to achieve that very necessary improvement in the cost structure of the mill."

The union said it was willing to accept wage cuts, but sticking points in negotiations havebeen pension plan changes and severance pay.

Gary Richardson, who has workedat the mill for 31 years, said he's convinced the business can be profitable.

"The future is, mills, paper mills, newsprint mills are gonna be closing. If you can keep your cost low enough, youre gonna stay in the game. Theres always gonna be a market for newsprint. The trick is to keep your costs low and thats the problem right now," Richardson said.

Union caught off guard

Tuesday's announcement caught the United Steelworkers local off guard, president Cam Sokoloski said. It was just a few days ago that there was hope that the mill would reopen.

Sokoloski said on Dec. 1 that the Manitoba government offered to send a letter to Tembec urging the company to get back to work.

"[Tembec] kept telling us their intent was to run the mill," Sokoloski said Tuesday.

The company had told the union their intent was to permanently close the plant if a collective agreement couldn't be reached by January, Sokoloski added.

The union will now turn to pressuring the federal government for employment insurance benefits to see the workers through the winter, Sokoloski said.