Norbord Inc. has announced Thursday it will permanently close its oriented strand board plant in 100 Mile House, saying reopening the mill was uneconomic and it was “unlikely to have a role to play in the future.”
The move comes just two weeks after the company offered a tentative settlement agreement to those who had lost their jobs in August 2019 when Norbord curtailed operations at the plant on a temporary/indefinite basis. Only five workers remained at the plant as the care and maintenance group.
“The Cariboo region in which the mill is located has been under wood supply pressure for the past decade as a result of the mountain pine beetle epidemic and more recently significant wildfires, leading to a 50 percent reduction in the region’s annual allowable harvest,” Peter Wijnbergen, Norbord’s President states in a media release on the company’s website. “Taken together, the current and expected ongoing wood supply shortage makes operation of the mill uneconomic and Norbord has decided to permanently close 100 Mile House.”
Chuck LeBlanc, president of Public And Private Workers of Canada Local 9, said he was notified Thursday of the company decision, which was reached at a company board meeting.
“We’re disappointed they’re closing the plant but at the same time it’s not a great shock to us,” LeBlanc said. “At the beginning, we thought it was just a ploy for them not to pay severance. Wood prices are higher than they’ve ever been and there is available fibre but they made it a business decision.”
Norbord Inc. has posted its strongest quarter ever, reporting adjusted EBITDA of US$322 million for the third quarter of 2020 compared to US$84 million in the second quarter of 2020 and US$33 million in the third quarter of 2019. The company has said it wants to focus on its operations in the U.S., noting the 100 Mile plant was its highest cost operation. Earnings in the current quarter include US$10 million of costs related to the closure of the 100 Mile mill.
Norbord indefinitely curtailed the mill’s production since August 2019 in response to a wood supply shortage and rising fibre costs. The union filed a grievance on Aug. 27 that the plant had been permanently closed and employees were entitled to severance pay under Article 14, section 5 of the Collective Agreement. A further grievance was filed on March 7 and was slated to be heard Dec. 2-4.
However, the company reached out two weeks ago with a tentative settlement agreement. Workers had to make a decision by Friday last week.
LeBlanc said many of the former workers have moved on to other jobs, but there are still more who remain in the community. The settlement, he said, will “help the make decisions for the rest of their lives and live them a sense of closure.
“A lot of these guys have worked there since 1994 when it opened,” he said. “You pour your heart and soul into a place and it’s tough to move on.”
The union is continuing to negotiate a settlement for the five workers who remain.
More to come.