The naturtal gas increase would not have effected the mill as they have a contract with a different supplier than Sask Energy. The mill closure is market related. There is way too much paper supply in the world for the current demand and there will be more capacity taken out of the market. A year or so ago Franklin Investment Group spent in excess of $1 Billion US and bough 7% of Weyerhaeuser shares. They told the company that they feel Weyerhaeuser shares should get to $90, up from $65,or so, and this is what we want you to do to get there. There is goig to be big changes in all of Weyehaeuser which may see them out of Canada completely, and may see them out of paper production completely. Wall Street rules.
This mill has the lowest fibre cost in all of Weyehaeuser. This mill has the highest end product cost in all of Weyehaeuser. When you are looking to cut it will always be the highest cost producer that is first to go. The company has been telling the employees for many years that they have to get their costs down. This mill runs on five year labour contracts and they just signed a new deal 6 - 8 months ago. The union passed a strike vote and made it very difficult to get the restructuring plan in place. I know that the company was having a great deal of difficulty getting the union to follow through with the implementation of the restructuring. The mill had made some substantial gains in productivity over the last year or two. A couple of years ago it took a 65 cent dollar to break even and now they were breaking even 85 cents. Every penny increase in the CDN dollar costs the mill $5 M.
This paper machine has a rating of 700,000 tons per year and all new paper machines comiing on line in the world are 1,000,000 +. It doesn't take any more people to run the bigger machines. Weyehaeuser has similar mills to ours in the states that produce the same amount of paper with 350 employees, instead of our 690. Which one do you think they would keep? Our labour laws will require any new owner to inherit the CBA. Weyehaeuser told this mill to 'change or die' and the union was not willing to change enough, and it looks like they may die, they're certainly dying.
The key thing here is that we protect these jobs and this industry. As a small business owner in this community it is a huge hit to our economy. The mill is not the largest employer in Prince Albert, but it is the largest real wealth generator. The largest employer is the health region, but that is all public money, it is not making anything new for our economy. This why we can't have the government coming in and buying these jobs. What we need is a climater and environment that will attract and sustain private industry. The government cannot grow our economy by paying us with our own money. Labour has to understand that no company owes them a living just for showing up most of the time. Governmnet cannot make jobs and support industry. The only real thing the government can do is to make it worthwhile for someone to invest here. Capital tax is an issue, labour laws are an issue, power is an issue and those are things the government can do something real and decicive about. Unfortunately I doubt there is any political will to really do anything. Saskatchewan has the some of the greatest diversity and quantities of natural resourses in the world. There are few palces in the world that have more to offer, but just seem too scared to do anything with it. In order for things to change, things have to change.
