Richmond, BC-based Catalyst Paper has reached an agreement with 1,000 of its employees that will see the workers take a 10 percent paycut and various adjustments to vacation, health and work rules to “provide Catalyst with a competitive labour cost structure.”
The new contract will start after the current one expires on April 30 and will be effective until April 2017. Annual savings as a result of this new contractual agreement will be between $18 and $20 million.
“Approval of the new labour agreements lets everyone know that the people who make up Catalyst are taking the actions necessary to save jobs and ensure we have a viable and competitive business for the future,” said Kevin J. Clarke, President and Chief Executive Officer of Catalyst. “We appreciate there is still an enormous amount of work to do to complete the restructuring plan that will enable the company to exit creditor protection on solid footing going forward.”
Catalyst Paper entered court-ordered creditor protection at the beginning of the year after defaulting on a $21 million bond interest payment on December 15. The company’s debt is estimated to be over $810 million.
Catalyst Paper has its roots dating back a century as the Powell River Company. It adopted the name of Catalyst Paper in 2005.