Jacques Boissinot
Tembec Inc. has agreed to invest $300-million in its Temiscaming pulp mill in Quebec after unionized workers agreed to concessions to make the facility more productive, a union representative said Monday.
With a majority of just 53 per cent, members of the Communications, Energy and Paperworkers Union ratified a new five-year labour contract covering 680 employees at its flagship operation in the province.
Instead of 10 per cent wage concessions that were part of pattern bargaining, Temiscaming workers agreed to work longer hours and accept operational changes at the facility. Workers there have lagged others in the industry in wages.
"I know it was a difficult choice for the people, but I think it was an excellent collective agreement for the future of the entire region, because the pulp plant will continue with the major investment," national union representative Maurice Parisien said in an interview.
He said the vote was close because workers at the coated paperboard and specialty chemical products sections of the facility weren't happy with the concessions to help the high-yield pulp operation.
Employees will work 42 hours per week, up from 40 hours. They will also be paid 2.2 per cent of vacation pay, instead of 2.4 per cent.
There were also some changes to vacations and payment of benefits.
Mr. Parisien said the workers will be entitled to recover their concessions if Tembec doesn't live up to its commitment to invest $300-million.
Tembec said the agreement doesn't specifically refer to $300-million. But it includes a "comfort statement" requiring the company to indicate by July 2012 that "significant physical improvements to the site necessary to make the operations competitive will be forthcoming."
The company said it has tried to address cost-saving issues in a manner that is best suited to individual sites.
For Temiscaming, it has targeted about $10-million in cost reductions, said John Valley, executive vice-president of business development and corporate affairs.
"The combined effect of contract changes related to compensation, site organization and work rules will make a significant contribution towards meeting that target," he said in an e-mail.
Tembec president and chief executive officer James Lopez called the agreement an important milestone for the company.
"It demonstrates the commitment of our employees to improving the competitive position of the operations near term and to achieving critical operational and cost improvements required to support the pursuit of significant upgrades to the site," he stated in a news release.
The forestry company has 6,000 employees at more than 30 locations.