Massive strike forces Western Forest lumber curtailment
July 29, 2019 | 10:59 am CDT
BRITISH COLUMBIA - A strike from the United Steelworkers - in effect since July 1 - has forced Western Forest Products to temporarily curtail production at its Ladysmith sawmill in British Columbia. More than 1,500 of the company's hourly employees and 1,500 contracting employees are on strike.
“We’ve had to make the decision to temporarily curtail operations at Ladysmith due to a lack of log supply in part due to the United Steelworkers’ decision to take strike action and prevent the movement of logs, amidst challenging market conditions,” said Don Demens, President and CEO of Western. “We commend Ladysmith employees who have demonstrated tremendous dedication to running a safe and high-performing operation. Going forward, we will continue to monitor log availability and market conditions to determine when we can resume operations.”
The curtailment will impact 67 employees at the sawmill.
In early July we wrote about how 3,000 Western Forest employees walked off the job after negotiations between the company and the United Steelworkers union broke down.
“It is extremely disappointing that the USW has chosen to take strike action," said Demens in a press release. "After cancelling scheduled bargaining sessions and refusing mediation, it’s clear that the USW is intent on inflicting damage to the coastal forest industry, which already faces significant market challenges, including having to pay the highest softwood lumber duties for shipments to the United States of any jurisdiction in Canada and the loss of market share in Japan due to Japanese government subsidies for their domestic industry."
United Steelworkers says its members voted 98.8 percent in favor of striking because Western Forest has not seriously addressed union proposals, reported the Coast Reporter. The union believes an agreement can be reached quickly if talks resume, said the Coast Reporter.
The union is seeking a three-year deal to replace a recently-expired five-year deal. Wages and benefits cannot be agreed upon, as well the implementation of a new drug and alcohol policy the union says is targeting employees for "simply having trace amounts of THC or marijuana in their system."
Western Forest says the strike comes at a challenging time for the company. With the exception of one facility, all production in Canada is shutdown. The company's two facilities in the U.S. are still operational.
Many Canadian sawmills are struggling. British Columbia - Canada's largest lumber-producing province - exported just over 514 million board feet of lumber to the U.S. in October 2018, down from 645 million board feet from the same time 2017. Many Canadian lumber leaders have taken a hit - including West Fraser, Canfor, Conifex, and Interfor - and restricted lumber production, with West Fraser and Canfor curtailing production more than once.
All cited challenging lumber markets, high log costs, log supply constraints, falling lumber prices, and U.S. import tariffs as factors.
Softwood lumber import tariffs of around 21 percent were levied onto Canada last year. The National Association of Home Builders (NAHB) told MarketWatch that those tariffs are restructuring the entire lumber global supply chain - incentivizing U.S. buyers to import from overseas rather than ship lumber across the Canadian border.
Canada's imports to the U.S. have certainly slipped, as we've covered before. British Columbia - Canada's largest lumber-producing province - exported just over 514 million board feet of lumber to the U.S. in October 2018, down from 645 million board feet from the same time 2017.
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