Posted on 08/27/2003 1:31:11 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
Stora Enso North America will eliminate about 490 jobs in central Wisconsin by mid-2005 as part of an effort to cut $65 million in annual fixed costs, the company said Tuesday.
A total of 1,050 jobs will be eliminated the next two years, representing 17 percent of the company's North American work force. Parent company Stora Enso Oyj of Helsinki, Finland, already planned to eliminate 350 jobs as part of a "profit enhancement program" created to combat a struggling paper market and sagging economy.
The company added 700 more job cuts as part of Tuesday's announcement.
"The elimination of the 350 (announced in August 2002) has not been implemented, so the number we're dealing with is 1,050," said Tim Laatsch, senior vice president of communications.
"This is something that affects all our facilities and support departments," he said.
The job losses will be felt in some areas more than others, and some will be felt more immediately. Stora Enso will permanently shut down two paper machines in Biron and Stevens Point on Labor Day, eliminating 60 full-time positions.
The central Wisconsin mills in Wisconsin Rapids, Biron, Stevens Point and Whiting will decline from 2,638 employees to about 2,148 by mid-2005, Laatsch said.
"None of the unions are opposed to working with management to achieve a 15 percent fixed cost reduction," said Wayne Pankratz, business agent for Local 95, Office and Professional Employees International Union. "The differences are in the way they are achieved."
Pankratz believes unions were disappointed the large number of hourly jobs cut was not proportionate to management cuts. He said Local 95 compiled a list of 50 suggestions on how to make reductions without eliminating hourly jobs. That list was delivered to Stora Enso North America President Lars Bengtsson in July.
"There is always a lot of talk about unions and management working as a team," Pankratz said. "A lot of times, plans are developed by management, and we don't really know if our suggestions even made it out of the chute.
"Another concern is the lack of specificity at the meeting (Tuesday). We went in anticipating we were going to get more concrete information."
Laatsch said specifics of the plan are still in the works.
"We do not have a specific time line (of job reductions) at this time, but there are a variety of things taking places at the mill level through the appropriate people in human relations," Laatsch said. "They will be notified in an organized and structured fashion as these get phased in. At that time, they will receive specific information as to what their options are. They may vary from mill to mill."
Laatsch said all guidelines in the collective bargaining agreement will be followed.
In the next two years, Stora Enso North America will reduce its employment from 6,050 to 5,000. Reductions in Duluth, Minn., took place in March and are under way in Niagara.
Economic impact will be felt throughout Wisconsin, said Gerry Ring, interim chairman of the University of Wisconsin-Stevens Point Paper Science Department.
"It diminishes the state's tax base," he said. "Ultimately, it diminishes the attractiveness to bring in new residents, and it keeps on depressing us."
Stora Enso Oyj's stock was slightly off Tuesday, but that dip probably was unrelated to the announcement, said Pat Murphy, an investment representative with Edward Jones of Wisconsin Rapids.
"Locally, we look at this as a negative," Murphy said. "As a shareholder, it would be a positive because they're trying to make a profit for their divisions."
Stora Enso Oyj's stock closed at $12.49 on Tuesday, off $0.33.
Stevens Point Mill paper machine No. 32 and Biron Mill paper machine No. 24 will permanently shut down Monday. Those closures will result in the removal of 94,000 tons of annual papermaking capacity.
Stora Enso said several factors combined to force the reductions: a lagging economy that has been slow to recover from the downturn of the past three years, increased competition from lower-priced imports, higher energy costs and higher production and labor costs. In July, Stora Enso North America reported a loss of $98 million during the first half of 2003.
"All of us are experiencing the declining economy, and the economy has been slow to recover, and we're faced with a substantial loss," Laatsch said. "We can't control the economy, and we can't control the lowest paper prices in the last 25 to 30 years. That leaves us with addressing the fixed costs."
"There's no one thing that put us in this situation. The financial losses of the last six months is what put us here."
Bengtsson said the company already has made many changes to improve profits.
"We have put a freeze on hiring, placed restrictions on travel and reduced the use of outside consultants," he said in a written statement. "We will implement a freeze on salaried employee wages and will consider cost-effective modifications in the employee benefit program as well as departmental reorganizations."
Every part of the business within the North American division is included in the cost-reduction effort announced Tuesday, according to a company press release. Salaried and hourly workers will lose their jobs "consistent with the needs of each facility to ensure a safe workplace and quality production," the company said.
Stora Enso will use a variety of measures to cut jobs, including severance, retirement and layoffs, and will carry out the reductions according to union contracts.
The company said it plans to offer job-seeking assistance.
Stora Enso North America produces coated and supercalendered papers for the printing and publishing industries, specialty papers, pulp and scrap paper. The division has papermaking operations in Wisconsin Rapids, Stevens Point, Whiting, Kimberly, Niagara, Biron, Duluth, Minn., and Port Hawkesbury, Nova Scotia, Canada.
What is your point?
Please let us all know. Thank you very much.
Did you notice the Please and Thank You? I was exactly not arrogant, assinine, unintelligent or attacking, but particularly solicitous.
Please try again. What is your point in posting this particular article? Do you have an interpretation, policy prescription or other point to be made?
(This is where the humor would go....nah, I'll pass)
Your a known entity: a flying monkey.
Disingenous displays of feigned etiquette are being ignored.
You have lost all credibility.
You have two choices: you can go spew your tripe elsewhere, or you can stay here and continue to make an ass of yourself. Makes no difference to me which one you choose, but those are the options.
"Stora Enso said several factors combined to force the reductions: a lagging economy that has been slow to recover from the downturn of the past three years, increased competition from lower-priced imports, higher energy costs and higher production and labor costs."
The key argument hereabouts usually being that high wage American jobs can be protected from low wage foreign workers through the use of tarriffs.
Let's see the results of such a tarriff prescription in the Steel Industry of the U.S., per the WSJ:
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Bruce Bartlett
March 28, 2003
The steel tarriff decision
A little over a year ago, on March 5, 2002, President Bush made a serious mistake by imposing tariffs on imported steel. At the time, there were many, including myself, who said that the negative impact of this action on steel consumers would be much greater than any benefit to steel producers. Thus the economy as a whole would suffer. In the time since, this prediction has been borne out by experience.
Last month, the Consuming Industries Trade Action Coalition, a business group, published a study showing that as a result of tariffs, job losses among steel users exceed those in the entire steel industry. It estimates that 200,000 jobs were lost among steel users, while there are only 187,000 total people employed in the steel industry.
---------------(snip)
The whole article can be found here: http://www.townhall.com/columnists/brucebartlett/bb20030328.shtml
And so we see an actual substantive proven negative result to the usual policy prescription of tarriffs to protect American jobs.
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