CANADIAN LABOUR-MANITOBA:

WHO (IF ANYONE) WILL OWN THE PINE FALLS PLANT ?:

Since the announcement of Tembec's intention to sell their paper plant in Pine Falls Manitoba an initial three groups "interested" in the purchase has dwindled to two. One, as previously reported here at Molly's Blog, is an ex-manager who has spun his managerial power through various other corporate entities to the point where he feels that he can raise enough of other people's money to make a bid on his old workplace. Sorta like an upstart bourgeois in 18th century England purchasing a landed title. Mr J.P. Bradette, the potential purchaser in question, has offered to give employees an "equity share". My spider sense starts tingling at this. First question-how many employees ? Mr. Bradette has stated very bluntly that he intends a large number of permanent layoffs (one of the reasons why the present workers are not keen on his plan). Seems more like an attempt to divide the workforce and undercut worker opposition to his proposal than a serious offer.

One also has to ask how much such equity shares would amount to, both in terms of magnitude, in terms of type of share and in terms of relative percentage of the total shares in the company. Anyone with as long a corporate managerial career as Mr. Bradette is, of course, very familiar with how managers often go against the interests of their shareholders. The reason he feels comfortable in this offer, besides the fact that he hopes to pull the teeth of his competitors for the mill, is that he is well assured that any such equity will be both a minor component of the total equity and potential profit and also leave the workers, should they accept such an offer with no control over the future direction of the plant-which might be important if the way od making such a profit involves either selloffs to others or actually making a profit by declaring bankruptcy. It's been done before.

The other proposal on the table, a joint buyout on the part of the workers involved and the nearby Sagkeeng First Nation. This is much more to Molly's liking. An actual producers' co-op seems an impossibility at this time, and this proposal would be optimum in that it would leave control in the hands of local people who would obviously want the mill to stay. I would suggest that the local municipality should also consider joining this partnership. On the part of the First Nation it would be obvious that they should demand preference in future hirings, There should, however, be no layoffs that the other partner to the deal, the present workers, would have to suffer. I would also hope that only a realistic proportion of the $1 million that the Province has promised to the community for the "transition" will be spent on any "feasibility study" ie one that somebody's friends or those that the government of the Province hopes to make their friends will latch onto like leeches. Sorry to say it, but it's my humble opinion that the "consulting" industry is, in the vast majority of cases, smoke mirrors and pickpocketing.

I would also hope that proper legal guarantees be put in place so that there could be no future selloff of the plant, like what happened in the 1990s when it ceased to be worker owned, for temporarily attractive terms. The mill may, indeed, have to be sold in the future no matter who owns it, but this should be only when it is plain that there is no chance of it being self-supporting. For now I would also suggest that the asking price might be diminished by pointing out that any attempt remove portable assets might run into difficulties. No advocacy of anything, of course, aside from the possibility that public peaceful protest might occur in such an eventuality. It should also be made plain, probably by the municipality, that the buildings would not be allowed to sit derelict and rusting away forever. It is within the mandate of a municipality to access penalties and even expropriate any derelict property in their jurisdiction. I'd suggest that such a plain pointing out of the facts might reduce the desire of Tembec's present management to try and charge an inflated price to whomever may buy the plant.

But enough of my own opinions. Here's the story of how things stand today from the Lac Du Bonnet Leader, a local area newspaper.

MLMLMLMLMLMLML

Battle for mill begins
Posted By Marc Zienkiewicz
A battle for ownership of the Tembec paper mill in Powerview-Pine Falls has begun, the Leader learned this week.

Cam Sokoloski, president of United Steelworkers (USW) Local 3-1375 which represents over 250 mill employees, said the union submitted a letter of intent to Tembec this week notifying the company of the union's employee buyout proposal.

The union, in partnership with Sagkeeng First Nation, is also submitting a proposal to the town's Community Development Committee in an attempt to conduct a feasibility study that's intended the bring the buyout to fruition.

"We're going ahead with it — we think this is best option for all involved," Sokoloski said.
Mike Fontaine, economic development officer for the First Nation, said he's excited at the prospect of the mill being community-owned like it was in the 1990s when the first employee buyout took place, prior to the mill being sold to Tembec.

"Sagkeeng is a part of this community and this could be beneficial to everyone," Fontaine said. "We were asked awhile back if we would be willing to explore this and we jumped at it and said absolutely."

Tembec recently put the mill up for sale. It has set a deadline for Feb. 1 for serious purchase offers, with the end of March being its final sale deadline.

If the mill isn't sold by then, the plant will be mothballed, Tembec has said. (Ah, as I said above, "derelict property"-Molly )

John Valley, Tembec's executive vice president of business development and corporate affairs, said the company will only be considering offers that have "real potential" to lead to an eventual takeover.

He did not elaborate as to the criteria the company is using to determine that potential, except to say time is of the essence and anyone putting an offer forward must consider that.
"If someone were to come along and say 'by golly, I want to buy the mill but I still have to get my advisers together and I have no money yet,' obviously we'd have to look at that very carefully," Valley said.

Sokoloski said if the feasibility study goes ahead, the funding for it will come out of the $1million fund recently set up by the provincial government to help the community deal with the aftermath of the recent Tembec labour dispute, which saw nearly 300 mill employees locked out by the company Sept. 1 of last year.

The lockout officially ended Jan. 13 after the Manitoba Labour board intervened. However, the workers are still out of a job and are now attempting to apply for retroactive Employment Insurance benefits.
Bradette's plan a go
As the union prepares its buyout proposal, former Tembec Vice President of Sales J.P. Bradette is also going ahead with his own purchase plan, Bradette told the Leader this week.

"In addition to offering employees a significant ownership stake in the new company, this proposal will create roughly 180 well-paid union jobs and some 20 staff positions, not to mention the benefits to the community as a whole," Bradette said in a statement written for the Leader.

"The reality at this point is that the employees will have no jobs, no wages, no benefits, and certainly no ownership in the mill, unless a viable offer can be made to Tembec by Feb. 1."

Bradette recently came to Powerview-Pine Falls to meet with the community's chamber of commerce and the union membership as well. His plan, of which no details have been made publicly available, was overwhelmingly rejected by the union membership last weekend, Sokoloski said.

Bradette said he's disappointed the union did not accept his offer.

"My understanding is that the issue was not even put to a vote; a decision as important as this one should be put to a secret ballot," he said in his statement. "I understand that my proposal may not fit with every union member's beliefs. To them I say that your support does not obligate you to accept the equity share and the well-paid jobs that will be created. Out of concern and respect for your colleagues and neighbours however, give them a choice."

Sokoloski recently told the Leader that Bradette's offer was "worse" than the Tembec concessions that led to the original lockout last year.

Bradette said support from the union is key to making his plan a success.

"The support of the employees is only the first of many steps required before the mill can be restarted. Without this support there can be no viable offer, and my concern is that the mill assets will be sold off to cover the shutdown costs, with no hope of a restart," Bradette said.

"I urge all employees and members of the community to think long and hard before ratifying such an important decision. There is still time to act, although the window is closing quickly."