Pulp Truth Special Edition

Solidarity Works! Three-and-a-half Years of Success in Paper


As summer draws to a close, we recap and celebrate the resounding success we’ve had in paper bargaining. We’ve achieved this success despite overwhelming odds in an industry that has seen unprecedented change because of mergers and acquisitions; the emergence of China and Russia’s insatiable demand for fiber to supply world-class paper machines that produce paper that is exported and illegally dumped on our shores; the rise of paper imports; a weakening economy; an increase in electronic communications; and high energy and transportation costs.

Our members’ solidarity, increased communication and mobilization made our victories possible.

Successorship, otherwise known as a contract protection clause, has been the backbone of our success. When a successorship provision is in our contracts, your job, wages, benefits and
workplace rights stay in place if your mill or converter is sold. Without this provision and the power of our membership and union, our sector would have been in shambles.

IP Successorship

National paper bargaining started taking off in 2005 when just months after the merger, USW International President Leo W. Gerard met with CEO John Faraci of International Paper
(IP), the industry’s largest player. Through these discussions and the persistence of our members, we achieved a major breakthrough: Successorship for IP’s 14 mills.

This marked a significant change in collective bargaining and labor relations at IP where disputes and conflict had been the norm for years.

The successorship clause quickly paid off when IP sold its coated free sheet assets to private equity and other firms. Two of the sold mills in Sartell, Minn., and Bucksport, Maine, were
purchased by a private equity firm and are now known as Verso Paper. By having successorship, the Verso mills were able to build on their contracts in subsequent bargaining in 2007 and
obtain a common expiration date, which builds true bargaining power.

Smurfit-Stone Container Successorship

When Smurfit-Stone was looking to spin off assets as well, our union moved to protect our members by securing successorship for the company’s transactions with private equity firm,
Texas Pacific Group, and Kapstone. During these negotiations, a pattern for successorship agreements was reached that immediately covered all USW-represented workers employed by
Smurfit-Stone. It was also agreed that the health care coverage workers had in 2005 would apply to contracts negotiated in 2005-08.

“In today’s time, it is not so much about making progress on health care as it is in making sure we hold the line on health care and not go back,” said Smurfit-Stone worker Eddie Wingfield. With national paper bargaining (NPB), you feel more confident you won’t go into a contract bargaining situation and come out with less than the NPB goals.”

Stora Enso Global Agreement

After over 21 months of bargaining, all contracts with Stora Enso were open or near expiration. This created the pressure necessary to getting the first global contract of its kind in the paper sector. A common expiration date and successorship were obtained, which proved important when NewPage, owned by private equity firm Cerberus, bought Stora Enso. NewPage has to now honor the global agreement, which includes job security, gain sharing of profits, industry-leading wages, and pension and health care provisions. The common expiration dates enable the
former Stora Enso mills to bargain from a position of power with NewPage.

Landmark IP Agreement

As part of the ongoing discussions with IP that the IP membership approved and endorsed, a landmark global agreement on economic and job security issues was reached for the company’s
14 USW-represented mills. IP mill membership overwhelmingly ratified the agreement, which included a method of funding retiree health care benefits that was worth millions of dollars. Successorship was expanded to the 14 mills, health care was secured, and the pension multiplier was increased to $50 in an industry where employers are demanding 401k plans instead of a guaranteed pension. The global agreement also allows for local contracts and bargaining to remain in place; no changes can be made to those local agreements without the approval of
the locals’ membership.

“We did away with IP’s ability to adjust our insurance, and the global agreement also left us the autonomy to negotiate our contract on local items,” said Randy Burkett, an IP member at
the Cantonment, Fla., mill. “Job security in today’s world is something unheard of to get. With the power of 14 mills and coordinated bargaining, we were able to secure our jobs.”

IP Converters Get Protection Too

The IP discussions then proceeded to a global agreementcovering over 30 IP converters—the largest agreement of its kind ever in the paper industry. Successorship was obtained; the wage pattern was improved by 100%; the workers got the best pension multiplier in the converter sector; and the PPO active medical health care plan cannot be changed unless the union agrees to it. Local unions maintained their ability to negotiate local issues, and management will not be able to force changes to the contract without the local’s approval. The master agreement also restricts reduction in the converter work force to volunteers or attrition except during temporary layoffs and partial or complete closures.

Weyerhaeuser Workers Get Job Protection

Upon hearing that Weyerhaeuser might sell its containerboard packaging and recycling business, the Weyerhaeuser council immediately pursued a deal for the industry pattern successorship
clause. Besides immediately getting this clause in their contracts, workers also got longer term deals in exchange for substantial wage increases that would preserve their contracts for a longer period of time in the event of a sale. This move paid off when IP bought Weyerhaeuser’s assets, and the transition was seamless for over 2,800 USW-represented Weyerhaeuser employees.

“The Weyerhaeuser council knew successorship was an important issue, and little did we realize eight months later that successorship language was going to be the most important thing we negotiated,” said Weyerhaeuser council president Robert Tapp. “The one great benefit was we didn’t have to reapply for our jobs. I have seen in other facilities where workers did not have that successorship clause and they had to either reapply for their jobs or start over with a new owner at less pay. The day of the Weyerhaeuser-IP transaction was business as usual.”

Grassroots Solidarity Results in Domtar Agreement

Grassroots solidarity in bargaining for all locations at one table helped the Domtar council secure an umbrella master agreement covering economic and job security issues. The deal locked in members’ health care coverage for the remainder of the current local union agreements and the next four-year local contracts. Besides obtaining an increase in the pension multiplier by $5 in the first year of each contract, Domtar workers also got successorship language to protect their jobs and contracts in case their facilities are sold.

Global Agreement Reached for PCA Mills

In mid-August, the USW reached a global agreement with Packaging Corporation of America (PCA) that covers over 1,200 workers at the company’s four mills. This five-year agreement
provides important employment security provisions, immediate successorship language, the best wage increases in the paper sector, a $6 per year of service pension increase that immediately is put in place and the best health care in the paper sector that is locked in until 2013 and 2015 in some cases. This deal paves the way for a global agreement with the PCA converters.

Local union members enthusiastically endorsed all these deals, with ratification votes well over 80%in every case.

Taking the Offense in Health and Safety

Working in the paper sector can be hazardous. Arms are caught in paper machines; workers’ heads are scalped in converter operations. Workers are killed in devastating explosions, such as the one at IP’s Vicksburg, Miss., mill and the more recent explosion at PCA’s Tomahawk mill that killed three.

To change the way our union and the paper industry approach health and safety in the paper workplace, we have sent out to local union mill officers a survey that is the first of its kind. We are trying to gauge what is being done at the mills regarding health and safety and what is needed to support local union leaders, rank-and-file members and the communities in which they work.

To make sure every mill returns its survey, the deadline has just been extended until September 19. An analysis of the results will be done, a report issued and a health and safety plan created. Our goal is to push for changes in and better regulation of the paper industry.