Fraser Papers executives and one of Canada’s biggest unions will meet today in Toronto to discuss freeing Fraser from bankruptcy protection by allowing the company to escape about $185 million in pension obligations.
The daylong meeting between Bill Peterson, Fraser’s human resources department director, and leaders of the Communications, Energy and Paperworkers — or CEP — Union Local 29 of Edmundston, New Brunswick, is “absolutely critical” to Fraser’s plans to escape bankruptcy and maintain operations, Peterson said.
“If we get this agreement, and an agreement with OPEIU [the Office and Professional Employees International Union], we will be in a position to save close to 2,000 jobs in New Brunswick and the St. John Valley,” Peterson said Monday.
CEP union officials did not immediately return telephone messages and e-mails seeking comment on Monday. They were said to be in transit to Toronto from their national offices in Ottawa.
Both sides were due to start intensive discussions — Peterson declined to call them negotiations — on Monday night. It was expected that they would continue into today and possibly into Wednesday.
Wednesday might be a critical day for Fraser’s plans to create the re-formed, post-bankruptcy Fraser company, temporarily called Newco, and prevent the closing and scrapping of the 680-worker mill in Madawaska and its sister pulp mill across the St. John River in Edmundston.
The company’s lawyers will be in bankruptcy court in Toronto to discuss their latest attempts to save the company, Peterson said.
A credit group of Fraser owner Brookfield Asset Management of Toronto, CIT-Canada and the New Brunswick provincial government won’t proceed with a proposed $180 million bailout of Fraser unless the CEP contract is amended to eliminate the union’s defined benefit pension plan and replace it with another type of pension plan.
About 65 percent of the 460 members of United Steelworkers Locals 291, 365 and 1247 of Madawaska approved a new three-year contract on Feb. 8 that made the same sacrifice and also put into effect an immediate 8.5 percent wage cut.
Another condition Fraser must meet is the renegotiation of letters of credit with its primary power supplier, NB Power, that encumber about half the company’s available cash, Peterson has said. That effort continues.
The steelworkers’ pension concession allowed Fraser to walk away from $6 million in annual pension liability — another key concession to the company’s rebirth as Newco, company officials said.
Fraser sought bankruptcy protection in Canadian and U.S. courts in June 2009. The St. John Valley’s largest single employer and Madawaska’s largest taxpayer, the Fraser mill manufactures hybrid and uncoated groundwood papers and the brighter coated and uncoated freesheet papers.
Fraser, which has corporate headquarters in Toronto, also owns six other paper and pulp mills in Ashland and Masardis, plus mills in New Hampshire, New Brunswick and Quebec.
CEP has fought the restructuring. A small group of union members and pensioners occupied the Toronto and Gatineau, Quebec, offices of Brookfield Asset Management last month to protest attempts to tamper with the pension.
Gaitan Minard, secretary-treasurer of the national CEP, called Brookfield’s plan “shameful.” He said Brookfield made $649 million in profits in 2008 and suggested that Brookfield’s money could save the workers’ pensions.
Peterson said that a meeting last week with CEP leaders was “encouraging.”
All Fraser executives and salaried personnel have been working tirelessly to keep the company going and to emerge from bankruptcy, he said.
Their own positions are among the jobs they seek to save, he said.