Oregon workers ratify new contract at plant owned by Minnesota-based investment firm


Following a solidarity campaign that drew support from Minnesota unions, workers in Halsey, Oregon, approved a new, six-year contract with Cascade Pacific Pulp, a paper mill purchased in June by a Minnesota-based private equity investment firm.

Members of United Steelworkers Local 1189 ratified the contract Thursday after first rejecting the company’s “last best and final offer” Oct. 9 and threatening to strike, reported Fernie Mirelez, a representative of USW District 12.

When negotiations resumed Tuesday, Mirelez reported, union negotiators were “very successful in not only improving the package, but getting it front-loaded as well.”

The company, said Mirelez, “knew they weren’t dealing with just a small local in Halsey, Oregon, but with allies throughout out the country.”

Representatives of United Steelworkers Local 1189 came from Halsey to Minnesota last month seeking a meeting with Wayzata Investment Partners, the firm which re-opened their closed plant in June but forced workers to re-apply for their jobs and accept significant cuts to wages and benefits.

Lunch hour in posh Wayzata Sept. 8 brought the unusual sight of a group of 50 Minnesota union members who chanted and waved signs in a show of solidarity with the visiting Steelworkers from Halsey (see story).

The demonstration — and the fact that Wayzata Investment Partners refused to meet with the workers from Halsey —created a buzz in Wayzata, earning sympathetic coverage by the local Lakeshore Weekly News and a local news website, www.wayzata.com. The Labor Review also filmed video of the action and posted the footage on YouTube.

The Wayzata action was part of an international campaign organized by USW in support of the Halsey workers. Mirelez said the workers “were amazed that a small paper local in Halsey, Oregon would have so much support from the labor community in Minnesota, Oregon, Canada, USW District 12 and the International Union.”

He added: “we believe the solidarity that was created was instrumental in getting the company to budge.”

Workers approved the company’s new contract offer by a five to one margin, Mirelez said.

The agreement:

• Restores wages to within 50 cents per hour for most employees (compared to wage rates before the June re-opening);

• Increases wages by two percent per year for the next three years, then provides annual wage increases equal to the industry average in the region;

• Reduces newly-imposed medical premiums from 30 percent of the total to 20 percent, with the employer now paying 80 percent;

• Restores five weeks of the maximum seven weeks of vacation possible under the contract with the previous plant owner.

The contract’s pay increases are retroactive to June, Mirelez said, totaling $230,000. Most important, Mirelez said, the contract includes successor language that guarantees the workers’ contract will stay in effect even if the company is sold again.

Private equity firms like Wayzata Investment Partners normally do not hold a company for the long-term: They’re looking for a short-term gain. This is a growing problem throughout the country, as private equity firms acquire companies, then cut costs — workers’ jobs, wages and benefits — in hopes of selling soon to make a quick profit.

“The successor language ensures that the employees never will have to go through anything like this again during the life of the contract,” Mirelez said.

The solidarity campaign for the Halsey workers, Mirelez said, “shows when you really put pressure on these [private equity] investors, you can have an impact.”

After Wayzata Investment Partners purchased the plant, the many longtime workers there were forced to “re-apply” for their jobs — and take pay cuts of 12-28 percent. Health care costs tripled. Workers whose longevity brought up to seven weeks vacation were cut back to one week. And the defined benefit pension plan was eliminated.

While the new contract largely restored wages and vacation time and reduced the health increase, the defined benefit pension was lost, replaced by a 401(k) plan under which the company will match up to eight percent of employee contributions by 2012.

All in all, Mirelez said, “we’ve had a successful end to the campaign here in Halsey, Oregon.”

The contract covers about 99 workers. The plant employed 120 workers before the previous owner, Probe & Talbot, filed for bankruptcy and closed the plant May 9.

Steve Share edits the Labor Review, the official publication of the Minneapolis Regional Labor Federation. Visit the federation’s website, www.minneapolisunions.org