Danny said yesterday he thinks the merger of Abitibi and Bowater may be a good thing - and Kathy Dunderdale said the union says it does not expect the merger will affect Newfoundland and Labrador.
Let's look at what industry analysts are saying:
These two quotes from the Globe and Mail online:
"It's more a cost-reduction story than a revenue-enhancement story."
The Bowater-Abitibi merger should "theoretically reduce capacity and improve the real price of newsprint," Mr. Rowland said.
The article talks about the real concerns in the pulp and paper sector - competition with China - quality and changes in paper products and reduction in demand.
There is no question that BowaterAbitibi - if the regulatory bodies approve the merger - will be reviewing all assets in the new company. If the analysts are correct and the objective is to reduce capacity - we should be out of the gate early.
Considering one of the two new headquarters will be in Quebec - we can expect the lobby to keep capacity there will be intense - equally true of Ontario.
We need to start our lobby efforts now - for both Stephenville and Grand Falls - Windsor. Next week is too late - and burying our political heads in the sand will not help.
There are positives in both mills that we should be promoting - and government should be pro-active and not re-active as it relates to discussions with the company. With all the by-elections on the go - particularly in Port au Port - you had better get some action and commitments from all the candidates. They are all just keeping their heads low and hoping the announcement will just fade to the background.
Get some real answers now - before it is too late. We must have our research done - we have to know what our competition in Quebec and Ontario are planning to offer.
9 comments:
If anyone thinks that the merger of Abitibi and Bowaters is not going to have an effect on the one remaining operational mill in Grandfalls, then they are out to lunch. The reason for merging is to reduce newsprint capacity and to find the cheapest ways of producing and delivering newsprint to their customers, to maximize profit.
It's time for Grandfalls to realize that #7 machine is obsolete by todays standards of modern Papermaking. It is slow, and narrow, which limits its production capabilities. You can't take a 1930's car and turn it into a state of the art modern type vechicle. Sooner or later you have to cut your losses and scrap the piece of junk. Same principle applies here with #7.
Our premier likes to say that the province should be run like a business, and I agree. Wouldn't it then make more business sense to keep a mill running that could actually produce paper of high quality and efficiency. This mill existed in Stephenville. The only thing lacking was the OK from government to allow one machine in each Town, which is what Abitibi first wanted in April, 2005. This is an example of where politics and good business sense clashed, with politics winning over business sense.
Lobby efforts for Stephenville?
Those people have already left the province.
The Province should pass a law banning this merger. They should intervene at the highest level, stamp their feet and hold their breath until those bastard shareholders relent. How dare they make a corporate decision.
I'm sure it would be sufficient to begin lobbying for the province's assets in the same way Quebec and Ontario will lobby for assets in their jurisdictions.
What assets do you want to lobby for?
Anonymous #2, just stating facts, not a lobby effort for Stephenville. By the way, there are still people living in Stephenville.
No the province should OWN the mill. This is OUR forest! OUR mill! OUR paper! Newfoundland first! Quebec second!
The lobby question was for Sue. What assets in Stephenville did she want to lobby for
Sue I think you have a bunch of idiots starting to post here on the blog. If Abitibi could not see the far more superior mill should of been kept running maybe Bowaters (which will own 52% of the new merged company) will see. This could be away of closing the costly money loosing operations in G-Falls and keeping the power from Bishop Falls flowing mill in Stephenville...You never know what is around the corner....But if we let Abitibi demolish it before the merger is complete !?!
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