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(The following article is from the January 1-31, 2009, issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $25/year, or $12 low income rate; for U.S. readers - $25 US per year; other overseas readers - $25 US or $35 CDN per year. Send to: People's Voice, c/o PV Business Manager, 133 Herkimer St., Unit 502, Hamilton, ON, L8P 2H3.)

By Sean Burton

AbitibiBowater announced that it will close its paper mill in the central Newfoundland town of Grand Falls-Windsor in March 2009, after its offers were overwhelmingly rejected by the union. The Newfoundland and Labrador provincial government, with the opposition's full support, has passed legislation to expropriate the company's hydro and timber rights.

     This includes a hydroelectric generating plant at Star Lake that sells power to the provincial grid. These assets will be run by the provincial energy company Nalcor. It is still unknown if a potential operator for the mill will be found. Almost 500 people will lose their well-paid jobs if the mill goes, and this town of 16,000 will face an uncertain economic future, albeit cushioned a little by state intervention.  

     Who is responsible for this: the company or the union? Opinion polls split the blame almost fifty-fifty, but blaming the union in this case is folly. AbitibiBowater was to cut almost 200 jobs as part of a restructuring plan. The union would not stand for such radical cuts, and rejected the plan. Instead of going back to the table, the company simply announced the closure.

     AbitibiBowater complained that the mill had the highest labour cost of all its operations. But the union regularly pointed out that company made little effort to modernize the infrastructure of the mill, which has been in operation for almost 100 years. In short, AbitibiBowater was happy that the union rejected the offer; it gave the company an excuse to get rid of it. The union took a principled stand, and the company revealed that it couldn't care less about such principles.

     Those who blame the unions usually say that we should just accept job losses because that's the way the economy works. Following that logic, why bother having a union in the first place? I was shocked that a CBC viewer actually called the mill's closure proof that unions have "outlived their usefulness". The argument was that any job is better than no job, and that the union should have accepted restructuring to preserve the mill as a source of employment in the town.

     That logic is frightening: "Let's just do what the company wants, since they know the market, and obviously they know best." That would be suicide for labour. It would also be suicide for stability, since the free market is inherently unstable. Without unions, companies could do whatever they wanted with their holdings. They certainly wouldn't bother restructuring an ancient paper mill in Newfoundland when they could just shut it down. It is sad indeed to hear some people say that mere workers shouldn't meddle in the affairs of corporate management.

     AbitibiBowater, when it was still called Abitibi Consolidated, closed a smaller paper mill in the western Newfoundland town of Stephenville four years ago, and the company's displeasure with the costs of the Grand Falls mill were also well-known then. Is the union bad because it would not be bullied by a bunch of profiters? Of course not. The capitalist free market is to blame, and we need to advocate a new economic system with workers' interests at heart.

     The only remaining large paper mill in a once-vibrant Newfoundland industry is in the city of Corner Brook, operated by Kruger Inc., which employs nearly one thousand people. For now, it looks like that mill will stay, but nothing is certain.

     Meanwhile, AbitibiBowater has decided to take legal action against the provincial government, most likely on the grounds that the expropriation of company assets constitutes a violation of NAFTA. What better time to reopen discussions on that very agreement? This showdown ought to remind people of the threat that NAFTA poses to workers.