Abitibi-Consolidated’s plans to spin off its hydro generating facilities in Ontario into an income trust and then use money raised to invest in the U.S. is being condemned by the Communications, Energy and Paperworkers Union of Canada.
“We have overall concerns about the spin-off itself and the potential impact it might have on the paper-making side of Abitibi’s business,” said Cec Makowski, CEP’s Ontario Region Vice-President.
“We intend to raise those concerns in the very near future with senior company management.
“What we find specifically and immediately reprehensible is Abitibi’s announced intention to use money generated from its initial public offering of income trust units to invest in the state of Georgia,” Makowski added.
“Our view is that Abitibi should be investing that money right here in Canada instead of closing mills in places like Kenora, Ont. and Stephenville, Nfld.”
Abitibi has said it will use $190 million (U.S.) from its income trust spin-off to buy the 47.5 percent of Augusta Newsprint Co. that it doesn’t already own.
The 150,000-member CEP is Canada’s largest union of forestry workers and represents some 3,500 people employed by Abitibi-Consolidated.