Union workers at Fraser Papers have agreed to take an immediate pay cut in an agreement management says is crucial to keeping the Madawaska mill running, and its 680 workers on the job.
In accepting a new three-year contract yesterday, the United Steelworkers union agreed to take an immediate eight-and-a-half percent wage cut, the Bangor Daily News reports.
About 65 percent of USW locals 291, 365 and 1247 approved the deal, but Maine’s USW international representative Duane Lugdon told the paper they didn’t do it happily. “They don’t consider this a fair deal but they recognize that the company has a gun to their heads,” the paper quotes Lugdon as saying.
Fraser Papers filed for bankruptcy protection last year, and emerged with the temporary name of Newco. Managers have said that approval of the contract was one of the conditions the re-formed company must meet in order to prevent it from shutting down.
The new union contract will save the company $4 million. In addition, the restructuring cuts another $7.5 million in salaried positions in Toronto, company officials told the paper.