AbitibiBowater head office in MontrealRyan Remiorz
AbitibiBowater Inc. and its union have suspended contract talks while they press government for commitments to protect employee pensions in the company's restructuring, the union representing Abitibi workers said Friday.
Dave Coles, president of the Communications, Energy and Paperworkers Union, said the two sides are proposing the establishment of a trust that would allow current pension benefits to continue.
"The union will not bargain a new agreement for our members until we know that the pensioners are protected," said CEP president Dave Coles. "We have made our position clear and we will now spend the next few weeks talking to government and consulting the pensioners directly."
Delegates from 23 local unions at AbitibiBowater pulp and paper mills in Quebec, Ontario and Nova Scotia met with company officials in Montreal this week to explore the renegotiation of the collective agreements which expired in May.
The contract with AbitibiBowater has in the past been a "pattern" agreement that was extended to the pulp and paper industry in Eastern Canada.
But the two sides agreed to suspend contract talks in favour of dealing with the pension issue and a joint company-union proposal was presented to Quebec Labour Minister Sam Hamad this week.
The union says follow-up meetings with Ontario Finance Minister Dwight Duncan and Federal Finance Minister Jim Flaherty have also been requested.
AbitibiBowater is under CCAA protection and has a deficit in its pension plans of $1.3-billion.
The union warned this week that either bankruptcy or a restructuring of the company's debts could result in a windup of the plans that would result in benefit cuts of up to 27 per cent for 8,300 current and 17,000 retired workers.
"We will not participate in a restructuring that makes innocent pensioners the victims," Coles said.
"There are reasonable and workable solutions and we have worked with the company to present those solutions to governments. Now we need answers."
"This is a moral issue about how we treat retired workers who have built this country," Coles added. "It is also about saving this country's largest forest company from ultimate disaster if governments fail to act.
Mr. Coles said that AbitibiBowater, despite its current difficulties, remains a cornerstone of Canada's forest industry and represents 25,000 direct and indirect jobs and a $750-million a year payroll.
"Our union will play its part to fix AbitibiBowater, but we need government intervention and we need a socially responsible restructuring plan by the company and the creditors," he said.