From the Chronicle journal (Thunder Bay, Ontario)
Regional News | By BRYAN MEADOWS | Nov 15, 2005, 22:40
Another wave of layoffs is coming in the perfect storm facing Northwestern Ontario’s forest industry. Citing high energy and wood fibre costs, Weyerhaeuser will permanently shut down the round-wood processing plant at its Dryden paper mill on March 31. About 40 employees will lose their jobs — 35 in the mill and five in contract harvesting operations — when the wood-room closes. Mill management told employees of the closure Monday morning.
Weyerhaeuser vice-president of Ontario operations Norm Bush said the action comes in the face of rising costs, a rapidly appreciating Canadian dollar, declining demand for fine papers and industry oversupply.
“This is one step in our drive to reduce our delivered fibre costs,” Bush said, explaining that current technology allows wood chips to be delivered to the mill for about the same cost as delivering an unprocessed log, which then requires chipping in the wood-room.
In addition, he said, concerns about chip quality have been addressed by new technology used in on-site wood-chipping equipment in the bush.
The layoffs come as Dryden continues to battle economic and social demons from a restructuring exercise at the local mill two years ago that chopped more than 385 workers.
“It’s a sad day for our community,” said Dryden Mayor Anne Krassilowsky. These cuts, she said, “compound the effects on everyone in the community as well as individual families. It causes a chain reaction across the community (with far-reaching effects on) individual homes, businesses and tradespeople.”
“I’m disappointed in the provincial government for not taking the necessary steps” to prevent further forestry job losses, Krassilowsky said. “The provincial government is missing in action.”
NDP Leader and Kenora-Rainy MPP Howard Hampton agreed. “The McGuinty government has done nothing to reduce the high electrical and wood fibre costs” crippling the forest industry.
While the government claims only older, smaller newsprint mills are shutting down machines and laying off people, Hampton said the Weyerhaeuser mill is perhaps the most modern in Ontario, and it produces fine paper.
“It shows the McGuinty government is wrong again,” he said, adding the plant closure is at a mill that’s modern and owned by a company that has invested millions on infrastructure, “yet it is being forced to the wall.”
Communications, Energy and Paperworkers Union spokesman Cec Makowski called the province’s inaction “a travesty.” “To date nothing substantial has been done to reduce the cost of delivering fibre to the mills,” he said. “It’s the workers who continue to pay the price of this inaction.”
Weyerhaeuser spokeswoman Bonny Skene said the province needs to do more to help the industry become more competitive. “We’re calling on the province to focus on fibre costs and make them competitive . . . (and) we have asked them to reduce fibre costs (immediately) by at least $5 per cubic metre.”
Skene said the forest industry aid package reduced fibre costs by only 78 cents per cubic metre, while the global and Ontario “gap” in costs is about $20. The average cost of wood delivered to Ontario mills is about $55 per cubic metre while the global cost averages to $35.
The wood-room closure had been the subject of speculation in the community over the past few weeks, and it was tied to a rumour that the mill’s finishing room was also facing the axe. Skene refused comment on the finishing room.
“We’re looking for all cost reduction opportunities that are within our control,’’ she said. “We have cost reduction teams in place throughout the mill.”
In the 2003 restructuring exercise in Dryden, Weyerhaeuser closed its studmill and chopped the workforce at its pulp and paper mill by about 25 per cent, citing factors including high manufacturing costs, overcapacity in lumber production in North America, the rising Canadian dollar and the impact of U.S. duties on Canadian softwood.
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