Read this article in:
13 November, 2006
The world’s leading forest products company, Stora Enso of Finland, has discarded meaningful relations with its workforce and their workers’ representatives in order to impose job sackings in both Finland and France. That became evident last week as trade union events in Finland and Brussels protested the company’s one-sided dictums over job cuts and paper machine shutdowns.
Last week’s stinging criticisms to Stora Enso’s intractable position of restructuring-by-job-cuts comes a month after the company’s disclosure that two paper mills in Germany and The Netherlands will close in 2007. Paperworkers in Reisholz, Germany, and Berghuizer, NL, had already been absorbed in a successful two-year restructuring project to cut costs and improve productivity, but Stora Enso issued a death warrant for the two mills in early October anyway. Nearly 700 jobs will be lost at those two operations.
Paperiliitto President Jouko Ahonen
ICEM Paper Sector Chairman and Finnish Paperiliitto Union President, Jouko Ahonen, expressed sharp denunciation of the company’s “lack of will” to engage fairly with the company’s workers and their representatives. Ahonen, speaking on behalf of himself, said the company’s unwillingness to consider local branch recommendations to prevent job losses at the Varkaus Mill in Finland, as well as on the company’s broken agreement to sell two paper machines at the Corbehem mill in France, so that an alternative business plan ensuring sustainable development could flourish.
Ahonen prefaced his remarks by calling attention to a statement by Stora Enso CEO Jukka Härmälä, made in reference to social dialogue with trade unions. Härmälä, who will step down as CEO in March 2007, commented that if it was not possible to agree with workers or their representatives with a pistol pointing their way, then a shotgun might be needed.
One does not think it possible to hear this kind of talk from an educated person in a leading position,” said Ahonen. “With this kind of attitude and behaviour, it is no wonder the company carries out its harsh agenda worldwide. But what has become of Stora’s motto that ‘Personnel is Our Most Important Resource?’”
The Varkaus mill, a newsprint, printing papers and paperboard mill in central Finland, is a case in point. Stora sought job cuts totalling 25 of the mill’s 800-member staff. Despite the local branch of Paperiliitto making proposals for considerable savings and for heightened efficiency in order to avoid the dismissals, the company refused the initiatives.
The Varkaus union of Paperiliitto called the firings a breach by Stora of a joint report entitled “Working Group on the Future of the Finnish Paper Industry.” The report emphasizes trust, transparency, and a full and complete information exchange during restructurings when the jobs of personnel are at risk. Stora’s decision to cut the 25 jobs anyway has resulted in the local branch declaring a moratorium on all cooperative efforts with the company.
“The local union branch and Paperiliitto were ready to agree on equivalent cost savings,” stated Ahonen. “And the company has constantly stressed the importance of such costs savings. But the reality is this company’s only aim is dismissals, and I feel this is to create an atmosphere of fear. This kind of style cannot be in the best interests of the company, and the owners of the company should be paying attention.”
One of those owners is the Finnish state, which holds 12% of Stora Enso’s shares. Ahonen and Paperiliitto representatives have met several times with Parliamentarians and government officials on Stora Enso’s anti-people, anti-worker policies.
On 7 November, the same day that the Varkaus branch union declared the cooperation moratorium, another group of workers’ representatives was meeting in Brussels with a high-level member of the Finnish Finance Ministry, Pertti Rauhio, with the same message. This meeting involved Stora’s anti-people position at the Corbehem mill in northern France. While dozens of French and Belgian trade unionists rallied outside the EU’s Parliament, representatives of French unions FCE-CFDT and Filpac-CGT met inside, along with European-level trade union organisations, to tell of Stora’s bad-faith decision at the French paper mill.
Following the closure of two paper machines there last summer, Stora entered into an agreement to sell the machines to a French start-up company called Green Recovery, and a workers’ association called les Géants de Papier Solidaires (LGPS). The enterprise delivered a business plan, backed by the French government, which called for reopening of one machine last month, which would make lightweight coated papers, while the other would restart in 2007. The business plan envisioned paper for degradable, fibre bags to replace plastic sacks, which are coming under an increasing level of public scrutiny for being environmentally unsound.
Running of the two machines would have ensured 280 of the mill’s 500 jobs.
Instead, Stora suddenly reneged on the agreement, preferring to keep the machines down to keep paper capacity off the market.
“The paper sector, perhaps more so than any other industrial sector, needs sustained operational development and long-term planning,” said Ahonen. “Stora Enso is only concerned with ‘quarterly-returns’ thinking. Even while talking profitability, the company would rather close mills and lose money rather than sell assets to get money.”
Ahonen expressed deep concern for Stora’s abandonment of the Finnish social model in the situations occurring at Corbehem, at the German Reisolz mill, and the Dutch Berghuizer mill.
“Shutting mills and machines is always catastrophic, irrespective of where it happens,” he said. “It shakes the very foundation of life for thousands of people. We are truly ashamed of the irresponsible behaviour of Stora Enso’s Finnish management.”
Corbehem paperworkers, behind their French trade unions, have vehemently lodged several public protests to Stora Enso reneging on the sale of the paper machines. Workers demonstrated in front of both Finnish and Swedish embassies in Paris (Stora Enso is a 1990s merger of two Finnish and Swedish paper concerns), and they began industrial action that blocked production from the company’s third machine at Corbehem.
Stora Enso’s current policy of short-term market conditions first, human concerns last is best depicted in an analysis on the closing of the Berghuizer mill near Zwolle in northern Holland. Finnish management commended workers and Dutch managers for cutting fixed costs and for creating strong results through a quality programme. But European overcapacity and pricing in printing and writing papers meant the mill must be shut, Finnish managers said.
They told Berghuizer workers that the company would not consider selling the mill. Stora Enso justified this position by stating that any third party buying the mill would face the same economic problems.
Ahonen believes that Stora’s business-first mentality should not be exclusive of the merits gained in running a set of business units humanely. “The key to being competitive in the marketplace is with a skilled, professional, and motivated staff,” he said. “And the motivation part of this equation is highly affected by the way in which personnel are treated.”