Four unions at Baileyville mill vow strike over pension issue

BAILEYVILLE – Despite the war and a grim national economic outlook, four unions at the local pulp and paper mill have vowed to strike over a pension dispute with new owner Domtar Inc.

At issue is the union workers’ desire to deposit funds from the proposed company-paid pension plan with a national union-run pension plan.

Members of the four union locals rejected Domtar’s latest offer on the matter Friday and voted 3-to-1 to strike.

On Monday, officials at Domtar would say only that negotiations are in progress with the four unions.

The unions are the International Brotherhood of Firemen and Oilers, Local 3, Chapter 330; Local 1057 of the International Brotherhood of Electrical Workers; Local 1490 of the International Association of Machinists and Aerospace Workers; and Local 2400 of the United Brotherhood of Carpenters and Joiners of America.

“None of the employees want to go out on strike and lose their paycheck. So we are hoping that the company will come around and change their mind on the pension. That’s the biggest issue, but there are other things as well,” said Stephen Perry, senior representative for the New England Regional Council of Carpenters.

Union officials are hopeful that a meeting Friday will help resolve those issues.

The four unions represent 178 workers at the mill, which employs about 600 people.

The Montreal-based company bought the mill from Georgia-Pacific Corp. in August.

A major sticking point is the pension plan.

Several years ago, the trade unions voted not to participate in G-P’s then-new pension plan. The company had dissolved an earlier version. Last year, the unions had picketed the company, but G-P refused to budge. With the purchase of the mill looming, the unions agreed to a one-year contract. “They came right out at the table … and said that the trades people were continuing to be punished for their refusal to participate in the company” plan, Perry said.

Perry said that before the current negotiations began, employees agreed that the No. 1 issue was restoration of the pension plan and said they wanted to participate in the International Association of Machinists’ plan.

The company agreed to the restoration of a pension plan and offered to contribute 65 cents an hour per employee, which would provide an employee a $30 per month benefit for each year of service. That offer would have been retroactive to the beginning of this year. The offer was contingent on the employees’ agreement to join the Domtar plan.

Union negotiators compared the figures and discovered that if they joined the IAM pension fund, that same 65 cents would provide an employee $56 a month for each year of service – “almost twice what they had offered and it wouldn’t cost them any more,” Perry said. “The company absolutely refused to participate in [the union] plan. … They said they wanted to be intimately involved in the pension plan to take care of their employees.”

Domtar gave its final offer Sept. 2, but Perry said that was not good enough.

Gaile Nicholson, Domtar manager of communications, said Monday afternoon that the company “has negotiated with the unions in good faith. We believe we have a fair and equitable offer on the table, and our focus is on completion of successful negotiations with our unions,” she said.

Joe Manza, president of the IAM local, said the company had proposed a six-year contract, “which is a long contract for us.”

Larry Russell, president of Local 1057 of the IBEW, said the trade unions “haven’t had a pension in the last 12 years or so. We have an opportunity now to have a good pension through the IAM, and the money the company is giving us toward the pension they want us to have will give about half the payout. … That’s a big issue for us,” he said.

David Lowell, business representative for the IAM and chief spokesman for Domtar’s trades bargaining unit, said that besides the pension issue, the company also is offering a wage increase that will not keep up with inflation. Last year, he said, the cost of living in Maine rose 2.7 percent, but the pay increase negotiated last year was 2.5 percent. “The company wants to continue that kind of wage increase during the first three years of the contract and then go to 3 percent the last three years of the contract,” he said.

Although company officials would not detail their concerns about the IAM pension plan, Lowell said company negotiators expressed concern about penalties they might incur if Domtar withdrew from the fund. “If the company got into the pension plan and then 10 years down the road, for whatever reason, got out of it and if there wasn’t enough money in the pension fund to pay for benefits that the Domtar employees had earned, the company would have to pay additional money. … However, our pension fund has never had a withdrawal liability. We are very well-funded. We have something like $5.8 billion in assets,” he said.

Lowell said IAM pension fund officials agreed to give Domtar a written guarantee that there would be no withdrawal liability for a five-year period.

Some union leaders questioned whether the company had negotiated in good faith. As a result, the unions have filed an unfair labor practice claim against the company. “Several weeks ago they withdrew a proposal that they had demanding a concession from the union and when they gave us the last, best and final offer they had stuck it back in there, and that’s bad faith bargaining,” Lowell said.

Asked about the national situation and the impending strike, Lowell said that the union was certainly concerned about what was going on in Afghanistan.

“In all honesty, we know it’s not a great time. We offered a one-year contract so that we could negotiate when things were better. They didn’t want to do that. They demanded a six-year agreement at these very low rates and with this pension issue the way it is,” Lowell said.

“With that facing us, we didn’t have any choice. It’s not unpatriotic or anything. We just don’t feel like getting boxed in for the next six years.”

Domtar is the second-largest producer of uncoated free sheet in North America and the third-largest in the world.