October 2004 - Logging and Sawmilling Journal -

Following on the path of industry consolidation, IWA members have voted to merge with the United Steelworkers of America, but some locals voted strongly against the deal.

Forest industry consolidation has been taking place at a rapid pace, including the completion of a deal which saw Canfor add to its sawmill operations with its takeover of Slocan Forest Products. The long-term effect on jobs remains to be seen, but the industry’s unionized workers—now part of the Steelworker’s union—are concerned.

Forest companies are getting progressively larger. And now so are unions in an attempt to keep pace and maintain influence. The merger of the Industrial, Wood and Allied Workers Union (IWA) with the United Steelworkers of America became official September 1, 2004. The IWA membership across Canada voted 60.1 per cent in favour of the assimilation. In the process, they created the largest private sector union in the country. The combined membership in Canada and the US is about 650,000. The merger is official, but the process was not without controversy or lingering feelings of disillusionment.

The vote in British Columbia was a squeaker, with 50.1 per cent of the IWA’s membership giving the thumbs-up to joining the Steelworkers’ fold. Some IWA locals in the province rejected the deal outright, questioning what benefits merging with the larger US-based Steelworkers would bring to their individual areas and membership concerns. But the IWA’s national executive says the merger creates a bigger, stronger union in the forest industry world of multi-national corporations. The Steelworkers have also an established lobbying presence in Ottawa and Washington, DC, something the IWA did not maintain on a sustained basis.

The closeness of the BC vote was tempered by the overwhelming support for the merger in other parts of Canada. The Prairies endorsed the move in a whopping 82 per cent vote, and IWA members in Ontario were not far behind with a 79 per cent approval rate. Many IWA members have expressed remorse about the demise of the organization as an independent union. It began on Vancouver Island in the 1930s. It was officially launched in 1937.

The IWA has been part of Canada’s industrial fabric ever since, especially in BC which has the strongest historical ties and the bulk of the membership. “I sure as hell feel nostalgic about this,” declares Jack Munro, a former IWA president and one of its most colourful and effective campaigners. “The IWA has been a major player in helping move this province along to prosperity. When the workers who produce the first dollar make a good wage and benefits, then everyone in the province benefits,” says Munro. That’s a sentiment widely shared by the union’s rank and file. “The IWA has a proud history. It is a great union. I wish them well in their new home,” adds Munro. “I guess it’s the end of an era but it’s certainly not the end of the IWA,” pointed out Norman Rivard, IWA president before the merger vote. “The merger has taken place and membership has voted, but what comes with the merger is an IWA Council that is part of the Steelworkers,” he explains. Rivard is the new chairman of the IWA Council.

The IWA-Steelworkers merger follows a wave of industry consolidations, most notably in the BC Interior. The latest action had Riverside Forest Products in play, with a hostile takeover bid from Tolko Industries, which was topped by a bid from BC coastal operator, Interfor. In mid-October, Tolko came back with a higher bid. Quebec-based Tembec has also expressed some interest in Riverside.

The role of the council and how it will slot into the Steelworkers’ operations remains to be defined. When Logging & Sawmilling Journal talked to Frank Everitt in early September, he was on his way to Vancouver for meetings about the council and affiliated concerns. Everitt is president of IWA Local 1-424, which has nearly 60 years of history in Prince George, BC. More than 90 per cent of the local’s members who voted on the Steelworkers merger were against the deal.

Other dissenting BC locals were in Williams Lake, Kelowna and Duncan. Everitt says the IWA Council seems to be a way to maintain a level of IWA identity. “But we’ve got to put some meat to the bones.” Local 1-424 attempted to halt the vote on the merger with the Steelworkers. It argued there was insufficient time or due process taken in putting together the merger proposal. The local also claimed the merger contravened the union’s constitution. But a BC Supreme Court judge rejected the local’s arguments. That’s all water under the bridge now. But it puts Everitt and the heads of other dissenting locals in a quandary. They represent a membership opposed to the merger.

Everitt is following an understandably cautious approach and keeping options open. “We have not made firm decisions,” he says. After more meetings he expects to report back to the local’s executive in October. “It’s a very difficult time,” he concedes. But he notes the Steelworkers “have put their hand forward to us” and want to work with them. But the membership of the locals opposed to the merger need to know what the benefits and values of it are to them, adds Everitt. “It may be a tremendous advantage in dealing with Weyerhaeuser, but we don’t have Weyerhaeuser here in Prince George.” The huge integrated forest company has raised union ire because it won rights in a labour dispute last fall surrounding the contentious issue of contracting out.

The union claimed Weyerhaeuser was contracting out work that should be performed by IWA members. By July, the union had lodged more than 90 grievances against Weyerhaeuser. The company, however, countered it was simply doing what it had to do to stay competitive for the long term. “The coastal industry has gone from 30,000 jobs 15 years ago to 10,000 jobs today, largely due to the fact that we are the highest-cost producers of forest products in the world,” says Weyerhaeuser representative Sarah Goodman. Both company and union have clearly stated positions. But it looks like if the Steelworkers choose to come out swinging with their newly enhanced muscle, Weyerhaeuser may well be the primary target. Reducing costs and trying to stay competitive is not, of course, unique to Weyerhaeuser.

All forest companies are pursuing those goals. It is a principal reason behind the wave of licensee consolidations in the BC Interior. Canfor successfully completed its deal for Slocan, and West Fraser is following the regulatory route for its acquisition of Weldwood of Canada. Riverside Forest Products, which assumed control of Lignum this spring, is itself the subject of a hostile takeover bid by Tolko Industries. The long-term effect on jobs from this spate of corporate manoevering remains to be seen.

In the short term, however, the uncertainties it creates have workers worried. “Some good news on the horizon is Dunkley Lumber with their expansion,” says Everitt. “We need entrepreneurs like them.” Dunkley is adding to its workforce for a new small log mill adjacent to its existing operations, 40 kilometres north of Quesnel, BC. The preponderance of bug wood in the Interior from the mountain pine beetle epidemic and the price of timber means the licensees there are not going to close up shop any time soon, says Everitt. But then, too—not that long ago—it wasn’t widely predicted the IWA would fall substantially from the industrial radar screen.

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