Talks between Fraser Papers and one of Canada’s biggest unions continued Tuesday in Toronto as Fraser seeks to emerge from bankruptcy protection by pressing the union to allow the company to escape about $185 million in pension obligations.
Negotiations “are still going on,” Gaetan Menard, national secretary-treasurer of the Communications, Energy and Paperworkers — or CEP — union, said at midafternoon. “The last report I had from my staff was that they were continuing. I don’t know what kind of progress is being made.”
Bill Peterson, Fraser’s human resources department director, has said CEP must allow its contract to be amended to eliminate the union’s defined benefit pension plan and the obligation it carries and replace it with another type of pension plan if Fraser’s paper and pulp mills in Madawaska and Edmundston, New Brunswick, are to remain operational.
Peterson did not return messages left Tuesday.
The company’s plan would imperil the pensions of about 1,000 retirees in Edmundston; Thorold, Ontario; and Thurso, Quebec, Menard said.
“Why would we collaborate to save this company if they don’t help our retirees? At the end of the day, we don’t see any gain to do that. We don’t see why we should help them if they are doing nothing for our pensioners,” Menard said Tuesday.
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, Peterson has said.
The union, Menard said, believes that Brookfield and the New Brunswick government have an obligation to safeguard the pensions of the retired workers, many of whom spent their lives working for Fraser’s paper, pulp and saw mills.
The company has more than $100 billion in assets and netted $112 million in the third quarter of 2009, down from $171 million for the same period in 2008, company reports indicate. Fourth quarter results and year-end summaries are not yet available.
The union believes that Brookfield could afford to invest in the pension and still make money, Menard said. Instead, he added, the company is using bankruptcy protection laws to escape an unwanted obligation.
“It is really not appropriate,” Menard said. “We are especially targeting Brookfield. Our target was Brookfield and to say to them, ‘You are going to make money with this new company. You should put some money in the pension plan so our retirees won’t be hurt.’ ”
Some speculate that if its attempts to escape bankruptcy protection fail, Brookfield will still proceed with plans to create a re-formed, post-bankruptcy Fraser company, temporarily called Newco, and prevent the closing and scrapping of its 680-worker mill in Madawaska and its sister pulp mill in Edmundston, Menard said.
“That’s one scenario,” he said. “We won’t let them go like that. We won’t stop. There are big players here — the provincial and federal governments — and they are doing nothing. We will put a lot of pressure on people. We believe Brookfield has the money to do something.”
Fraser is due in bankruptcy court in Toronto today.