Tolko asks union workers to take 10% wage cut

By Judie Steeves - Kelowna Capital News - March 23, 2008

Tolko has asked for a wage reduction from the United Steelworkers Union, local 1-423, for employees at its Kelowna, Armstrong and Lumby operations, but the union president is not optimistic it will be approved. Bruce Gardner, president of the local, says he will ask to see the books that created the situation Tolko finds itself in, but he’s not optimistic the family-owned company will provide that opportunity. Being a private company rather than a public one, it’s under no obligation to report to shareholders or the public. Gardner said the union is meeting company representatives on March 28 when he expects to be asked for a 10 per cent wage reduction, similar to that approved by workers at the Canfor-owned Tackama lumber mill in Fort Nelson. Canfor announced Jan. 18 it was shutting down an oriented-strand board plant and plywood mill there in April. But after getting approval for a wage reduction of 10 per cent and concessions from the government, Feb. 25 it reversed the decision to close the plywood plant. Of the 500 originally set to be laid off, 300 worked at that plant. Jim Baskerville, regional manager for Okanagan Operations for Tolko, said last week he would be spending time with government and the union to see if costs could be trimmed to keep operations going.

Another 45 workers at Tolko’s plywood mill in Kelowna were laid off last week for an indefinite period. Last year 130 at that mill were laid off permanently. However, there are still about 250 working in the Kelowna co-generation plant and sawmill. Gardner says labour costs make up only about 10 to 15 per cent of the operating costs, so it wouldn’t make that much of an impact if wages were reduced. “It would just be a token thing,” he commented. “Sometimes, in a perfect storm like this, you can only wait it out.” Right now, there’s a huge inventory of plywood. Distribution centres are full. With three-quarters of the province down, the market is still in the toilet, he commented. “It ticks a lot of us off that raw logs go across the line. Washington State has a no-raw-logs exported law, yet we export enough to run seven super-mills. “It doesn’t make sense to export those (raw logs) to mills that are competing with us,” he said. The lumber industry is reeling due to the slump in the U.S. housing industry, the strength of the Canadian dollar and the quality of wood due to damage from pine beetles. Because of the oversupply that’s accumulated due to the lengthy down-cycle in the industry, it will take even longer to come back up, say those in the industry.