Unions Vow Fight Against M-real's Decision to Shut Mills

Oct. 19, 2006 - European union leaders yesterday said they are outraged at M'real's announced proposals to shut down paper mills in the UK, Sweden and Germany, and say that they will not simply standby and watch the closures take place.

Amicus, Britain’s largest manufacturing union, has pledged to help the over 350 workers at M-real’s paper and packaging mill in Sittingbourne, Kent. “We will not take Metsäliitto’s proposal to close this site lying down. We owe it to our members and their families, who are angry, bitter and devastated, to do everything in our power to help," said Amicus National Officer, Peter Ellis.

M-real is a subsidiary of Finland's Metsäliitto.

On Wednesday, M-real announced an extensive restructuring plan that included mill and machine closures, a cost reduction plan, and the potential sale of some assets. The company said that it expected to complete the restructuring by the end of 2007.

“Metsäliitto have also decided to shut sites in Sweden and Germany. We will most certainly be contacting our sister unions there as well as contacting Paperiliitto, the Finnish paper union, to discuss a robust response to this tragic news where I am confident that we will get all the co-operation we need," Ellis said.

“The company are required by law to consult its European Works Council, in advance of any decision such as this. This did not happen and we will be considering our options in this regard," Ellis added.

The coated and uncoated fine paper markets in Europe have been hampered by overcapacity, and the mill and machine closures in M'real's plan would eliminate 485,000 tons per year of coated and uncoated woodfree paper or about 15% of the company's fine paper capacity.

Kari Jordan, Chairman of the Board of Directors at M-real, said "We firmly believe that further consolidation within the European paper industry is needed and that the structure of European paper merchanting is going to change. The planned restructuring program announced [Oct. 18] is the first step in the execution of the strategic review."

The mills and paper machines M-real has targeted for closure are: Sittingbourne in the (210,000 tons of coated woodfree paper), Wifsta in Sweden (175,000 tons of uncoated woodfree paper), and PM 6 and PM 7 in Gohrsmühle, Germany (100,000 tons of coated woodfree paper).

According to Amicus, a 90-day consultation period starts today (Oct. 19) and the Union will press for an enhanced package for its members who will be affected by the closure of the Sittingbourne mill..

In addition, ICEM (International Federation of Chemical, Energy, Mine and General Workers' Unions) General Secretary Fred Higgs vowed that “the ICEM will give every assistance to its affiliates in challenging the decisions by the company, and will liaise with other affiliates with membership in this company in countries world-wide.”

SOURCE: Amicus, ICEM, and M-real

See related story:
    - M-real to Begin Restructuring Program, Reduce Capacity (10/18)

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