Union yes vote saves Port Alice mill

Saving the closed mill appeared out of reach after an earlier offer was rejected by the union. Now, a new deal means some workers will be called back today

Some workers are expected to be back on the job at the Port Alice mill as early as Tuesday after union members voted overwhelmingly to accept the latest contract offered by a company wanting to buy the mill.

The Communications, Energy and Paperworkers Union local 514 voted 164-1 Saturday in favour of the contract, eliminating the last obstacle in the sale of the Vancouver Island mill to Neucel Specialty Cellulose Ltd.

The possibility of the 85-year-old mill ever reopening seemed remote last week when 57 per cent of the 138 union members who voted rejected Neucel’s previous offer.

At that time, Richard Bassett, managing partner of Charlestown Investments, one of the parties backing Neucel, said enough time and money had already been spent trying to revive the mill and Neucel was no longer interested.

As far as he was concerned, it was all over after that vote, Bassett said in an interview. But he said he is “ very pleased” a revised offer was accepted.

The mill — the only one in Western Canada that produces specialty cellulose used in rayon products — will need 250 to 300 people, Bassett said.

About 20 of those will be called back today and will start the next day, with others being added as the company sorts out who it needs, and when. There are hopes that the mill will be in full operation in March.

“There is a certain minimum that you have to have just to keep the lights on,” Bassett said. “ And then as soon as we can get organized we will start hiring people to start cleaning the place up because it’s a mess.”

The Port Alice mill shut more than a year ago after Lapointe Partners — which purchased the mill for $1 in a court-ordered sale after the previous owner, Doman Industries, fell upon hard times — stripped the mill of about $13 million in inventory and other assets and closed the doors owing millions of dollars to creditors and employees. The RCMP has recommended that fraud charges be laid against Wisconsin-based Lapointe.

Many people have left the village since the mill shut down, with the population dwindling to a few hundred from 1,100.

Bassett estimates 180 to 200 of the 300 employees who used to work for the mill remain in Port Alice. The company will have to look outside the immediate area for the remaining millwrights, pipefitters, electricians and plumbers as well as casual labour and managerial staff that it will need to operate at full capacity, Bassett said.

Bassett expects to have no difficulty finding the necessary workers, despite B. C.’ s shortage of skilled tradespeople, because of a number of Canadian pulp and paper mill closures that have resulted in about 5,000 layoffs.

Neucel believes the Port Alice mill can thrive despite the foundering pulp and paper industry because it makes cellulose products including rayon, and not paper products such as newsprint or kraft paper. Its biggest competitor — polyester — is affected by the rising price of oil, making rayon more attractive, Bassett said.

“ We are one of the very, very few that benefit from [ the rise in oil prices],” Bassett said.

Dave Coles, western Canada’s regional vice-president of the Communications, Energy and Paperworkers Union, said the union has had 19 permanent or partial closures of pulp and paper mills across Canada in the past four months.

“Every three or four days we lose another pulp mill in Canada,” Coles said.

Last week, Domtar Inc. announced the closure of four mills and the loss of 1,800 jobs across the country.

So having Port Alice reopening is “running against the tide,” Coles said.

The village has been able to survive the one- year closure of the mill through the generosity of other CEP union locals, Coles said. More than $120,000 has been donated, with more money coming in to tide people over until the mill is fully operational.

“ Our membership has been just pouring money into that community,” Coles said.

The town also received some i n d i re c t h e l p from the provincial government. To ensure that a deal could be reached, the province agreed that Neucel would not be responsible for past environmental damage. It also provided $200,000 a month to enable the bankruptcy trustee, Bowra Group, to continue looking for a possible purchaser.

David Bowra of the Bowra Group brokered the deal between Neucel and the union.

After the first contract proposal was rejected and Neucel threatened to walk, Bowra was able to find a compromise that he called a “ win-win” solution.

The new contract increased the employer’s pension plan contribution to 7.5 per cent from five per cent, in return for the union giving up one week’s vacation.

“This thing really had gone sideways Tuesday [ after the last vote] and I think we got lucky being able to bring it back together again,” he said. “ I think everyone wanted to make it work. It

was just a question of findi n g a way for

everyone to feel

they got something out of it

— a win- win situation.”

Bowra said the

s e n s e i n P o r t

Alice after the

union accepted the

proposal was one

of relief.

“ Clearly, without the mill there is no village,” Bowra said. “This meant a lot not just for the employees going back to work but for all the people that live in the village, their spouses and other people that depend on the mill, not just in Port Alice but also in Port McNeill and Port Hardy and the whole northern [Vancouver] Island.”

fionaanderson@png.canwest.com