Negotiations with AbitibiBowater suspended over pensions

MONTREAL , Oct. 30 /CNW Telbec/ - The Communications, Energy and Paperworkers Union (CEP) and AbitibiBowater have agreed to suspend negotiations for a new collective agreement in order to secure commitments from government that pensioners will be protected in the restructuring of the company.

"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 the company this week in Montreal 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 .

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 wind up of the plans that would result in cuts of up to 27% to the pensions of 17,000 retired workers and 8,300 current employees.

"We will not participate in a restructuring that makes innocent pensioners the victims," said Coles. "There are reasonable and workable solutions and we have worked with the company to present those solutions to governments. Now we need answers."

The joint company union proposal would establish a trust for existing pensioners with government guarantees and regulation changes to allow the trust to continue the current pension benefits. The proposal was presented to Quebec Labour Minister Sam Hamad this week, and follow up meetings with Ontario Finance Minister Dwight Duncan and Federal Finance Minister Jim Flaherty have been requested.

"Governments must understand the reality that without a solution to the pension issue, this company will not be successfully restructured," said Coles. "This is a moral issue about how we treat retired workers who have built this country. It is also about saving this country's largest forest company from ultimate disaster if governments fail to act.

"AbitibiBowater is in difficult times, but this company remains a cornerstone of Canada's forest industry and it represents 25,000 direct and indirect jobs and a $750 million per 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.

"I cannot emphasize enough that this company, our members and the pensioners are at a critical moment and time is of the essence."

Union delegates left Montreal yesterday while union leaders and company officials pursue meetings with the Ontario and the federal governments. The union will also hold information meetings for pensioners throughout Ontario, Quebec and Atlantic Canada . More information about meetings for pensioners will be posted at www.cep.ca.

For further information: Dave Coles, [phone] or Gaétan Ménard, [phone]