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Mackenzie in shock over mill closure |
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Written by GORDON HOEKSTRA
Citizen staff
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Tuesday, 06 May 2008 |
Mackenzie pulp mill worker Rick Berry says he's scared in the face of the shutdown of the plant he's worked at for 28 years, a development that took place after creditors failed to extend financing Monday to Pope & Talbot under its bankruptcy proceedings.
"This is not good," Berry, 52, said Tuesday. "What am I going to do now?"
About 260 workers are impacted by the pulp mill shutdown in Mackenzie, 175 kilometres north of Prince George, a community already hard-hit by a forestry downturn.
With the Pope & Talbot pulp mill workers off the job, more than 1,000 workers in the manufacturing sector will be out of work in the town of 4,700. That doesn't include hundreds more loggers and trucker impacted by AbitibiBowater's two sawmill shutdowns and a paper mill closure, and Canfor's sawmill shutdown.
"That means nobody has a job," said Berry.
Berry said he's also frustrated because the Mackenzie pulp mill is a money-maker. Pulp producers have benefited from sustained solid prices in North America and Europe in the past two years. Canfor Pulp, which operates three pulp mills in Prince George, posted profits of $43.5 million in the first quarter of this year.
Berry said he's also frustrated he has not heard "a peep" out of the provincial government.
That's a sentiment shared by Communication, Energy, Paperworkers union official Don Boucher.
He said he's disappointed the B.C. Liberal government is holding roundtables on the future of forestry but not taking any immediate action to help communities like Mackenzie, who are losing their workforce. "Workers are very upset," said Boucher, a senior union official in Western Canada who will travel to Mackenzie later this week.
Boucher said it's difficult to know exactly what will happen now, but he expects the pulp mill in Mackenzie could be idled for six to 12 weeks while an attempt is made to attract investors.
"People are angry, just like with the other shutdowns," said Mackenzie mayor Stephanie Killam.
But she said the community has to continue to work at making the town function and carrying out a diversification plan that includes tourism and mining. "We have to make something happen," she said.
Prince George North MLA Pat Bell called the collapse of a deal with the Sinarmas Group "disappointing" and said the provincial government was working with the receiver, financial institutions and Pope & Talbot to salvage the existing deal or fine another buyer. "The last thing Mackenzie needs at this point is another mill closure," said Bell, whose constituency includes the town.
He said the province is also working hard to deliver resources and programs to help displaced workers and communities hit by mill shutdowns. "That will not be far off now," said Bell, the agriculture and lands minister.
Pope & Talbot had been trying to close a deal with PT Pindo Deli for $225 million for three pulp mills, which would have netted Pope & Talbot about $100 million. But after passing a deadline on April 30, PT Pindo Deli terminated the deal.
PT Pindo Deli is a subsidiary of Asia Pulp and Paper, which in turn is a subsidiary of the Indonesian-based Sinarmas Group.
The pulp mill shutdowns -- which also impacted mills in Nanaimo and Oregon -- were ordered Monday after creditors did not agree to extend financing, essentially removing Pope & Talbot's access to cash to fund operations.
A PricewaterhouseCooper monitor report dated May 4 says that PT Pindo Deli suggested in its termination letter it was willing to engage in discussions with Pope & Talbot to resolve the outstanding issues, including "mutually acceptable alternative transactions."
However, the monitor said in the May 4 report there was no indication as to whether meaningful discussions were underway.
Industry observers have said that some factors have changed since the deal was signed two months ago. They include that the wood fibre supply situation had worsened for Pope & Talbot and improved in Indonesia, and the fact Asia Pulp & Paper is facing a default loan repayment of $104 million in the U.S.
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SIDEBAR
Pope & Talbot and PT Pindo Deli both want to complete a $6-million transaction on Pope & Talbot's sawmill in Fort St. James, according to a PricewaterhouseCoopers bankruptcy monitor report .
The report, dated May 4, noted that unlike the pulp mills sale, PT Pindo Deli did not issue a notice of termination. In the case of Fort St. James sawmill sale, the deal was not completed by the April 30 deadline.
PricewaterhouseCoopers in its report said it understands that all regulatory approvals required to complete the Fort St. James sawmill sale have been obtained. The major outstanding issue in completing the sale has to do with assuming liabilities, said the monitor's report.
PricewaterhouseCoopers said is has been advised by both parties they are hopeful of resolving the outstanding issues and completing the sale this week.
The mill in Fort St. James, 160 kilometres northwest of Prince George, has been shut down since mid-October, putting about 280 workers off the job.
John Wilson, a veteran Pope & Talbot worker, said they have little information as to what is happening with the sale. He said virtually all of the tradesman have found work elsewhere, while younger workers have also found work outside the community or chosen to go to school.
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Last Updated ( Wednesday, 08 October 2008 )
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