Dispute unites union, employers

Collaborating to save jobs, improve productivity in B.C. forestry

Embroiled in a full-blown trade war with the United States, unions and employers in British Columbia’s forestry industry have been working together like never before, with surprising results.

In May, the already struggling forestry sector was hit with a punishing 27-per cent duty on all softwood lumber exports to the U.S. It was widely expected the inflated cost of Canadian lumber in the vital American market would lead to the closure of Canadian lumber mills. It was projected the tariff would cost the $10 billion industry as much as $3 billion and 25,000 jobs. Since then, unions and employers have been working to defy those expectations.

A lot of attitudes have had to change, says Katrina Boguski, a training and development specialist with Slocan Forestry Products. But people are starting to understand that the industry is changing very quickly and they have to change just as quickly or risk losing their jobs or going out of business.

To be sure, there have been layoffs — as many as 6,000 by union estimates and last month Canfor Corporation announced it would let go 300 people in the next year — but through productivity improvements and by introducing third shifts at some sawmills, softwood lumber costs per unit have been driven down.

Which means the cost of Canadian lumber in the U.S. market is also staying down, the exact opposite of what many experts expected. In some cases softwood lumber operations are struggling to find and train people to staff new shifts while firms have actually beat financial expectations in the last quarter.

Suddenly an industry that was once considered the epitome of old economy is winning praise for its modern, cost-efficient operations and an impressive ability to react to uninvited change.

The crisis has forced organizations to take a hard look at how they have been doing business and explore ways they can do it better. Slocan closed two mills in late July, putting 500 people out of work. Since then committees have been formed to explore new business models that will, they hope, get the mills up and running again. “These mills were at the higher end of the operating cost scale and the duties were the straw that broke the camel’s back,” says an information page on the Slocan Web site, created to keep effected employees up to date on developments. Trade disputes, market conditions and government policy are all factors, but the mills need to become more efficient and reduce costs to resume operations.

People have become much more pragmatic in the past few months, says Boguski. They have seen mills close and they realize they have to work together to solve problems quickly or face the same fate. “I think in a way it was easier to do after those two mills closed. People are much more willing to change if they can see consequences of not changing,” she says. “You might dig your heels in, but if you’re standing in quicksand you’ve got a problem.”

And all the talk about improving efficiencies and being more productive isn’t only coming from the employer side.

Dave Haggard, president of the Industrial, Wood & Allied Workers of Canada (IWA), says that besides the extra shifts, the union has been promoting “negotiated partnerships” with employers. Union locals work with employers to find other ways to improve productivity. The union is taking more responsibility and wants to be more productive and efficient, says Haggard.

“We look at our union as a business too,” he says. If it can help cut costs, the employer will be able to create more jobs. “The more people we have working the more dues we get.”

Boguski admits that as a newcomer to the industry, she was at first surprised to hear the response to the tariffs was to increase production, though it soon made perfect sense.

“If your equipment is idle for a third of the day, then you are losing a third of your productivity,” she says.

But increasing operations by a third also poses significant HR challenges. “Suddenly you have people doing new jobs or you have new hires involved,” she says. Slocan had to work quickly to get people up to speed without extra health and safety risks and within the labour relations framework in place.

Beyond that, Slocan has been heavily committed to training supervisors to thrive in this new era of unpredictability. “You can do all the skills training you need, but tomorrow you might need a different skill just to stay in business.”

A new program has been developed that helps supervisors work effectively in uncertain times, how to problem solve and manage time effectively. This is a guerilla war, she says. It’s never clear where the next hit is going to come from, so supervisors need to be able to respond. “If your supervisors have a good sense of what changes are necessary they can’t be waiting weeks and weeks,” she says. “They need to make the changes right away.”

Unions, employers and the provincial government have also been working together to get Ottawa’s financial support for an early retirement program.

Early last month, the federal government committed $246 million for, among other things, training and job-sharing programs.

A nice gesture, but both unions and employers want that money used to encourage older workers to retire early with full pensions, says Haggard. The federal government isn’t considering what effect its proposals will have down the road, he says.

“If you’ve got an industry in crisis, you’ve got to look at where you are going to get the most bang for your buck,” says Haggard. When the workforce is already seven years older than the national average, money spent on retraining older workers who will retire in a couple of years is not a good use of limited funds. It would be far better to help older workers retire early so that younger workers will stay in the industry.

The IWA wants $150 million to help older workers retire with full pensions. With more than 4,500 workers older than 55 in the pension plan, $150 million would enable 3,000 people to retire early, says Haggard.

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