A 'perfect storm': Stora Enso Lockout in Nova Scotia

HALIFAX (3 May 2006) -- Six hundred and fifty paper workers, members of Communications, Energy and Paperworkers (CEP) Local 972, have been locked out by the Finnish multinational Stora Enso since January 26 although the machines have been at a standstill since December 24, 2005. Railway workers, truck drivers, wood lot operators, lumber jacks and others as well as the entire social economy of northeastern Nova Scotia are also affected. Despite enormous pressure to isolate the locked out workers, support for their cause is manifold. In this town of some 12,000 people over 2,000 rallied on March 20 through the main streets in their support.

Stora Enso is the world's largest forest products monopoly. It has over 46,000 employees world wide. Last year it locked out the workers in its Finnish operation making similar demands as in Nova Scotia. The Finnish work force has since decreased in numbers. They also acquired a German company, the Schneidersöhne Group last year, and reported a 13.8 per cent increase in profits. Despite of this, the company cites increased power rates, and "outdated" taxation and regulation as reasons why it is losing money and the inability to arrive at a contract with its employees. It demands that workers allow contracting out and accept the company's taking away of seniority rights. This was after twenty months of contract negotiations.

CEP is charging that Stora is refusing to respect the Eastern Canada pattern of contract. It is the norm in the pulp and paper industry that when old contracts are ended, the first contracts to be negotiated set a pattern that the others are expected to follow.

At the rally in March, CEP reported:

"The message to Stora-Enso was clear. 'We will not accept anything less than the pattern settlement already established and negotiated for most pulp and paper industry workers in eastern Canada, you should get back to the bargaining table and negotiate in good faith with your workers, stop using the lockout as a means to pressure the NS government to lower electricity rates and understand clearly, that the members of CEP Local 972 have the full support of their community, their families and the labour movement. 'Your actions are unacceptable and every day this dispute continues will make it more difficult to restore a positive relationship with your workers and their union'."

Bernd Rettig, chairman of the Port Hawkesbury board said, "The financial position of Stora Enso Port Hawkesbury needs to improve quickly and the parent company needs to know that the business fundamentals make sense over the long term." (Cited in Dow Jones Newswire, March 29, 2006.)

Premier Rodney MacDonald is offering a multi-million dollar scheme to help Stora generate some of its own power to reduce its expenses. No one is asking why Nova Scotia Power is being allowed to raise its rates anyway.

A financial report from Morningstar.com on Stora's 2005 performance says:

"In North America print advertising is forecast to remain healthy. However, increases in postal rates may have some negative impact on the growth in magazine and catalogue markets, and only modest demand growth is anticipated in magazine and coated fine paper. A further decline in newsprint demand is predicted. Prices are expected to remain firm in magazine and coated fine paper, and to improve in newsprint."

The operation in Nova Scotia involves the production of newsprint as well as magazine and calendar paper.

The same report also says:

"At Port Hawkesbury Mill in Canada labour negotiations have been ongoing for over 20 months. The machines have been at a standstill since 24 December 2005. As the negotiating parties could not reach an agreement, a lockout was declared on 26 January 2006."

The CBC has an online report on the Canadian pulp and paper industry in which they describe the present climate as "a perfect storm" quoting some trade unionists. The reasons for this, they say, are:

"The industry is being pummelled from three directions: by international economic trends, provincial policies and changing technology. Any one of the factors would have been disruptive; coming together, they are remaking a key Canadian industry -
including pulp, paper and timber, forest products represent three per cent of the economy -- and the resource communities that rely on mill jobs."

This struggle is not restricted to Stora or Nova Scotia but is Canada-wide and even world-wide. Clearly the company is focused on maximizing its rate of profit and, to do so, it will attempt to extract tribute from anybody -- its employees, its suppliers, its customers or government who may make contributions "on behalf of taxpayers" under the pretext of "making Nova Scotia competitive."

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