Finnish Union Ends Meeting With No Strike Over Stora

Finland’s paper workers ended a meeting over job cuts and plant closures at Stora Enso Oyj (STERV), Europe’s biggest papermaker, without calling a strike.

They also called on the government to appoint a new minister to manage state shareholdings. Prime Minister Matti Vanhanen must replace Jyri Haekaemies in charge of state shareholdings, the Helsinki-based Paper Workers’ Union said in an e-mailed statement today.

“We need a quick change in state ownership steering by changing the minister responsible for state holdings,” the labor union said in the statement. “It’s in nobody’s interests that a significant part of Finnish export industry is being shuttered.”

Stora Enso is shifting production to lower-cost countries as European paper demand wanes, excess capacity causes prices to fall and expenses mount. The Helsinki-based company said yesterday it will shut the Sunila pulp mill during the second quarter and plans to close the Varkaus paper mill complex by the end of next year if poor sales and pricing of uncoated fine paper continue.

The Finnish government owns 12.3 percent of Stora shares and 25.1 percent of votes, according to the company’s Web site. Stora said yesterday it didn’t confer with the government before the announcement.

Past Strikes, Lockout

Job losses from Sunila and other planned cuts would total 450, rising to 1,100 if Varkaus is closed. The union’s president, Jouko Ahonen, said yesterday a strike in response to the job cuts was possible. Today’s meeting ended without a strike decision, union spokeswoman Eeva Eloranta-Jokela said by text message today.

Finnish paper workers staged 300 separate strikes, shutdowns and other actions in early 2005 to protest changes meant to increase productivity. Employers responded by locking out the workers. The industry lost 40 million euros per day of output as labor negotiations stretched the lockout to six weeks.

Losses at Finnish mills have wiped out profits at other locations for three consecutive quarters, Stora’s Chief Executive Officer Jouko Karvinen said last month.

Profit earned elsewhere has been erased by rising wood and energy costs in Finland, which was formerly a low-cost producer. Regions like Iberia and Latin America have enlarged their pulp and paper industries in the last 10 years, building on faster- growing forests and proximity to large markets.

Stora Enso has closed six mills worldwide since 2006, sold off operations and reduced its workforce by 37 percent to 29,000 employees. The company currently has 25 percent of its 80 production sites and 33 percent of its workforce in Finland. The Tolkkinen sawmill and a paper machine in Imatra will also be closed.

To contact the reporters on this story: Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net; Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

To contact the editors responsible for this story: Chris Kirkham at ckirkham@bloomberg.net; Lars Klemming at lklemming@bloomberg.net

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