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My message to the workers is 'beware'
Behind the closure of the Ste Anne's Pulp Mill, Nackawic, NB

An inerview with Barry Eisliger, Canadian Auto Workers

Our pulp mill in Nackawic was closed by its US owner, absolutely without any warning, on September 14, 2004. It had been operating for 35 years. At the time of the closure, we had about 400 employees, 300 of whom were unionized. We received a phone call at 6:30 am and by 7:00 am we were in a meeting with the Human Resources manager and other people from management. We were told that there was going to be a layoff. We were right in the middle of a maintenance shutdown. I asked how long the layoff would last. They said they did not know. At 2:00 pm that day, Buzz Hargrove received a call from the owner in New York.. He said that as a courtesy call he was advising CAW that they were closing the mill permanently and they were going to apply for bankruptcy protection. Hargrove asked to meet him and discuss the matter. The owner repeated that this was a courtesy call and he hung up.
First the US owner advised us that the mill was closed. Bankruptcy proceedings began the following day and within hours millions of dollars went to New York


We occupied the plant for a short period of time to bring attention to our fight. We also maintained a presence there and still do. First we maintained a full presence 24 hours a day until about a month ago. We made it clear that no asset would be moved out without our permission. We considered into be our plant at that time. Now a new owner has come on board so it's a bit of a new situation.

Things went so fast. First the US owner advised us that the mill was closed. Bankruptcy proceedings began the following day and within hours millions of dollars went to New York; millions of dollars including what could have been severance pay for our people, vacation pay, union dues, our RRSP contributions, etc, they all ended up in New York. Shortly afterwards, we found out how badly our pension fund was underfunded. The pensioners who were out there, approximately 170 from the union group, were going to lose somewhere in the range of 20-25 per cent of their pensions.
We have workers who have 20-25 and even 30 years and more of service and all those under 55 years old will get nothing.


Because of the pension legislation in the province of New Brunswick, anyone under age 55 will get absolutely nothing. Many of our people have worked in the mill since it opened in 1970. We have workers who have 20-25 and even 30 years and more of service and all those under 55 years old will get nothing. One person missed the cut by 4 days. His birthday was on September 18, if it had been four days earlier he may have got some pension, but because he was not 55 he is likely to receive nothing, if things remain as they are right now.

The plant was operated by Parsons and Whittemore, a private US company owned by the Landegger family. The owner established himself as the first creditor through a loan he contracted from a dummy corporation also owned by him. Through this first security he is hopeful of taking probably in the range of 30 million further dollars out of the province through the sale of assets. Now this is a small community and a lot of workers live either in the community or in the surrounding area. The community has been decimated; business is down. For example we have local contractors who have been in the mill for over 30 years, they have put their whole life in it as well. They are fighting through the Court to recover some money.
Now this is a small community and a lot of workers live either in the community or in the surrounding area. The community has been decimated..


We have at the moment succeeded in freezing the money from those assets in the province although a decision will come this summer. We are not really optimistic of winning simply- because Canadian law states that he is the first secured creditor and he will be paid before the employees.

We actually negotiated a new collective agreement in the spring of 2004. On June 1 we signed a 3 year agreement They told us the situation was not good. We actually negotiated some concessions; we accepted language changes in order to keep the company running but still they closed without warning on September 14.

My message to the workers is "beware." Those of us who are under 55 years old, we stand right now with absolutely nothing. The best scenario at the moment is to end up with a reduced pension, but we do not even know when we could get it. It could take years. I say "beware" because we thought that our pension plan was guaranteed. The money was supposed to be going into it. The plan was allowed to be underfunded at some level because the legislation allows for a certain deficit. I know that a lot of other pension plans are underfunded and I fear that if the same thing is going on in other plants, then if they go bankrupt the results are going to be the same.

If we were to change the distribution I would get a few dollars but I would take it from what my father is getting. That was their option.
The problem lies to a large extent in the bankruptcy laws. The owner was able to establish himself as the first creditor. If he had not been able to do that, then the money would be owed to us. We have been able to freeze the money made from the sale of some assets. For example there was money made from the sale of finished products that were in the warehouse. A decision will be made sometime in the summer and our lawyers have told us that it would be a tough fight to keep this money here because the owner has established himself as first secured creditor.

The management group is in the same situation and even worse in some ways. They have lost the same things that we did - when I say they are worse in some ways it is because they are just a bunch of individuals, they have no structure to defend themselves. They are actually phoning the union to find out what is going on.

We live in a small community, and for us to find a job is very difficult. Our people are experienced, they have been in the mill for 25-30 years. For them to find a job is difficult and secondly for them to go into a low paying job, what will they end up with at the end of the day? If we do not get our pensions, many of us will be financially ruined.

Co-worker interjects:


When the Conservative government came to Nackawic, they did not really have an answer for us. The only thing they came up with is to say that maybe what we should do is to change the distribution law so that everybody gets something. That was no good either. There is nobody who could live on the benefits that we would get. There is not enough money in the pot to offer even a half decent standard of living. I am 37 years years old and my father is retired. If we were to change the distribution I would get a few dollars but I would take it from what my father is getting. That was their option. They were lucky to get out of Nackawic with their lives.

Barry Elsliger:

Because of our actions, the critical components of the plant stayed there at least in part. At the same time through legal means we were able to hold on long enough that a new owner came on board which is Tembec-Birla. They have since negotiated with the owner in New York to buy the assets that are critical to operate the plant. There are some legal things to be clarified before they become the owners of the plant. It is hoped that the operations could start up by October, it will take that long because there is some work to be done. The plant was left in disarray and the repair work has to be finished. There are some things to be done environmentally and so on, as well they are moving to work towards a different product.

The new owners are not prepared to take on the liability for the pension fund. Their pension plan is a contributory plan which is basically a RRSP type of plan. For the current pension plan as it stands right now there are only 2 possibilities. One is a wind up which means that those over age 55 will get a reduced pension while those under 55 will get nothing. It is in the hands of the administrator appointed by the provincial government to proceed with the wind up of the pension plan. The second possibility is for the employees to possibly save the pension by going back to work and putting some money into the plan from our wages to keep it going and to use the plan to enable everybody to be paid.

I heard the owner saying in an interview: "Nothing I did was illegal" and in a sense he is right. But the law is one thing and justice is another. We look at all this as legalized theft. It is immoral and it is unethical.


Source: Worker's Forum, Supplement of the MArist-Leninist Daily, June 2005, Number 15


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