Tolko will be going to a four-day work week at its Soda Creek operation in Williams Lake and at its Armstrong stud lumber operations, the company announced Wednesday.
The flexible operating footprint in both mills will see a reduction of the company’s operating stud capacity by 20 per cent.
Vice President, Solid Wood, Troy Connolly said in a press release the decision is a result of high log costs in B.C. and weak market conditions.
“The continued and increasing pressures on log delivery costs in B.C. have eroded our competitiveness. This, in addition to continued weak markets, means we must take immediate and responsible action to ensure our long-term stability in B.C. We are moving to a flexible operating footprint starting next week. We will continue to monitor our cost competitiveness regularly to determine if further downtime is required. Our top priority is sustaining the business and the many jobs and economic spin offs it provides to our communities.”
United Steelworkers Union Local 1-2017 vice-president Paul French said Tolko told the union the intention is a four-day work week, but that could even be reduced further.
“Whether it stretches into a three-day week or continues on as a four-day week is up in the air and they are basing it on log costs,” French said Wednesday. “They’ve actually agreed to do job share which basically means EI pays for the lost day. The guys aren’t going to making what they normally make, but they aren’t totally out.”
French said the situation is frustrating.
“There are logs in the yard and I don’t quite get,” he said. “Lumber prices are down, but they aren’t totally in the tank, so my suggestion is why aren’t these companies talking to the forests minister and having legitimate conversations because every convention I’ve been to with COFI or other organizations is saying there will be less mills because of the fibre issues so of course they are going to pay for it.”
Critical of those who make comparisons between Alberta and B.C.’s forest industries, French said is not comparing apples with apples.
“I’m sure when Alberta gets down to a crunch in fibre their prices will sky rocket.”
United Steelworkers Union Local 1-2017 president Brian O’Rourke said he had not seen the Tolko announcement yet and didn’t want to comment on it specifically, but said there are many other mills in the region going with similar reductions or looking at doing the same.
“A lot of other operations are looking at going to a four-day week,” O’Rourke said, adding mills in Houston, Vanderhoof, Mackenzie, West Fraser in Fraser Lake are all looking at it.
“In 100 Mile, West Fraser, as you know, curtailed back to a three-day work week. They all getting into the work share program. It’s not the same as the full day wages, but it’s a good way to tie them in between and not shutting down completely.”
French said there are between 150 to 160 mill workers impacted by the latest curtailment and then the spin offs felt by loggers and truckers.
“Unfortunately it’s the working people that are taking the crunch.”
Connolly emphasized that these actions have nothing to do with Tolko’s employees.
“We know this is not good news,” he says. “However, we have a tremendously engaged and talented workforce, and we want them to continue as part of the Tolko family. Reducing capacity and changing our footprint is the best way to keep people employed and mills operating. It also gives us the flexibility to immediately react and adjust our schedule should conditions improve. It’s the best possible option right now in current conditions.”
Connolly says employees were informed Wednesday morning and Tolko’s HR team is on-site working with them to ensure they understand the implications of this change and determine their next steps.
“We want everyone to know this is not a decision we made lightly. Unfortunately, this is a tumultuous time for Tolko and the industry. We are forced to make tough decisions to ensure we remain sustainable for the long-term. We deeply appreciate the patience and understanding of our employees and thank them for sticking with us through this difficult time.”