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The Latest Key Prices from Madison's Canadian Lumber ReporterNEWS THIS WEEKRecent US Economic Indicators ; Kimberly-Clark to cut 1,600 jobs ; Quebec Forest Fires ; British Columbia Labour Issues ; Grant Forest Products Restructures ; Link to Lumber Price GraphsLink to News Archives
Updated on June 28, 2009
All prices are in U.S. dollars per 1000 board feet unless otherwise noted. |
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Irving, TX based consumer-products company Kimberly-Clark Corp. said Thursday it plans to cut 1,600 jobs, or 3 per cent of its global work force, as it slims down in the tough economy.
Company spokesman Dave Dickson said between 100 and 200 positions will be cut in North America, in addition to 600 employees who already took a buyout. He said it was too soon to say whether any of those cuts would come from Kimberly-Clark’s Canadian operations, which include plants in Huntsville, ON, and Saint-Hyacinthe, QC.
The company said it expects the cuts to save about US$150-million a year. In the second half of the year, the company expects the restructuring will translate into savings of 10 cents per share.
Tinder dry conditions and lightning strikes in Northern Quebec are keeping fire-fighting crews busy. Lightning sparked 30 new fires on Thursday, for a total of 51; three of which are out of control.
By Friday, firefighters struggled to contain more than 60 forest fires burning across northern Quebec. In the past week, the province’s forest fire protection agency has dealt with more than 100 forest fires across Quebec, most of them sparked by lightning. Thursday’s rain did little to slow the spread of 15 new fires, also caused by lightning, that burned overnight across the Abitibi, Saguenay and North Shore regions.
The two biggest fires are near Val-d’Or in the Abitibi region and the Manic V hydroelectric complex on the North-shore. They alone cover an area estimated at 10,000 hectares.
The province has brought in more than 40 firefighters from Saskatchewan, Nova Scotia and New Brunswick, and another 60 arrived from Maine, Vermont and New Hampshire to help.
Meanwhile, forest fire conditions in the North Bay region of Ontario are getting worse after several warm, windy days with little rain. With Ontario firefighters, including 14 from the area, already sent west to help battle blazes in British Columbia and Alberta, a crew from Sudbury is there on red alert.
Canfor Corp’s proposal to the United Steelworkers union calls for a lengthy six-year agreement, and seeks a simplified collective agreement that covers all of Canfor’s operations, according to the Prince George Citizen. In the company proposal provided earlier to workers in Prince George, Canfor says the $50-million cost reduction, possiblly involving a 20 per cent labour cost cut, will enable it to reduce cash losses and survive.
“This will also position us for a market recovery and attract investment critical for long-term sustainability,” said the company in the two-page document obtained by The Citizen.
The company proposal gives the first inside glimpse of the negotiation battle that may unfold between the BC sawmilling sector and the United Steelworkers, the largest forestry union in the province. The union has already indicated it’s looking for wage increases and a shorter contract.
The proposed Canfor reduction is in the same range as a recent rollback taken by workers at a shuttered sawmill in Mackenzie represented by the Pulp, Paper and Woodworkers union.
United Steelworkers local 1-424 president Frank Everitt observed that Canfor is counting on the workers becoming their banker.
“I imagine we’ll spend a fair amount of time talking back and forth before reaching an agreement,” said Everitt to The Citizen.
Bob Matters, United SteelWorkers Wood Council Chair, told Madison’s on Friday that the union has met with all four major employers’ groups and will research their proposals to seek a “progressive agreement”.
Matters described all four industry presentations as “ugly”.
In contrast to Canfor’s six-year contract offer, Matters explained the union is looking for a shorter, likely two-year, agreement. He also said that there is still speculation within the union as to whether the new contract will be tied to lumber prices.
Matters said the union is working hard to “pick a winner, quickly.”
Grant Forest Products, a closely held Canadian maker of oriented strand board with plants in Ontario, Alberta and South Carolina, has been placed under bankruptcy protection. The Earlton, Ont.-based company has $600 million in secured debt.
Despite the move, officials with Grant Forest Products insist that things will continue to be “business as usual,” with plants continuing to operate and no layoffs for staff.
At peak periods, the company employed nearly 600 people in Ontario alone, and 715 across Canada. However, that number has dipped to 200 in Northern Ontario in recent years as the strong downturn in the global economy and the United States’ housing market has affected operations.
These issues have also affected the company’s bottom line, with the closure of the company’s Timmins mill in 2006 and industry price changes leading to a drop in sales from $506 million in 2004 to $184 million in 2008.
The company’s Englehart OSB mill has operated on a reduced number of shifts through the winter, but an upswing in orders leads Bob Fleet, vice-president of woodlands operations, to speculate that full production could resume by from July through to September and possibly beyond.
Out of the 66 OSB mills in North America, Grant Forest Products’ Englehart facility is just one of 10 which continues to operate, and is one of the largest on the continent.
