Didn't Abi-Bow state a few weeks ago that they intend to take at least 1 million tons of newsprint off the market permently? What happened to capacity removal as the mantra?

Ya got to do the math. If any one particular mill remains running then other(s) will have to go. TBAY has one of the biggest newsprint machines (#5) in production today. "B" kraft has a very loyal customer base due to high quality and production standards.

The mill is also one of the bigger mills in the AbiBow stable, and probably one of the more modernized. The downside, and it's a big one, is the high cost of hydro and fiber in Ontario.

My take? If they can find efficiencies, they will continue to operate this mill, mainly due to reasons listed above. If not, it is likely to be idled. How long? Not sure, but I can't see creditors allowing a mill to sit idled on the books without a "for sale" sign out front. Rest assured, if it is sold, the new owners will push for efficiencies too.

It just was reported that Abi-Bow lost an average of 233/tonne on newsprint in July. That is aproximately 5 grand a truckload of paper. They are taking debtor-in-possesion financing from Quebec and Fairfax Holdings and using it to lose money on purpose, to drive White Birch, Kruger, and Tembec to close some or all of their newsprint mills. If successful, less Abi-Bow locations will have to be closed.

You hit it right on the money, disgruntled.
If anybody should be making money it should be AbiBow cause they are in protection and don't have to pay bills. But here they are loosing money, on purpose, hand over fist. A half a billion dollars in the last quarter !
The real question is how in the f#c* can they keep getting away with it ? Shouldn't the courts or the creditors be hollering bloody murder ? Is the CEP still sticking to the plan of waiting around to get picked off and have these bastards set the pattern ? If they get another extension and all the Exec's get to keep their jobs then their is something wrong with the system. Seriously wrong !

The system is rigged. Abitibe was ablt to obtain debtor in possession financing WITH NO CONDITIONS! Normally the largest creditors take over the company, as in the case with the recent Readers Digest bankrupcy filing. Somehow Abi-Bow was able to still call the shots, so until they are made to be profitable, they won't do anything. They never do. Funny thing is, they fought tooth and nail (maybe just a pr smokescreen)to avoid bankrupcy. Why?? Its been nothing but help them get out of severence, pension, cut personell, F*** with the union, obtain concessions, and completly ruin the newsprint market bt intentionaly driving down the price 270/mt.What a mess!!! and nobody is being held accountable for it

Well said. They'll lose possible more than a billion dollars in 1 year under creditor protection and that's O.K. This is unreal and where does it stop.

READ THIS ARTICLE!

Preferential treatment?
Union suspects Quebec loan guarantee tied to Bowater closings
By BRUCE ERSKINE Business Reporter
Tue. Aug 25 - 4:45 AM

A $100-million Quebec government loan guarantee may be influencing which of AbitibiBowater Inc.’s operations are being shut down while it attempts to restructure, says the president of Local 141 of the Communications, Energy and Paperworkers Union.

"We think that’s what’s going on," Courtney Wentzell said Monday in an interview. "There’s a lot of that (thinking) in this community."

The local represents 258 workers at Bowater Mersey Paper Co.

The Brooklyn, Queens County, mill is a subsidiary of insolvent AbitibiBowater, which is operating under creditor protection.

The mill, half of which is owned by the Washington Post, isn’t under creditor protection. But it has been subjected to temporary shutdowns as AbitibiBowater cuts production capacity to address declining global newsprint demand

AbitibiBowater recently reported a $510-million loss for the second quarter.

The Nova Scotia mill, which was closed for almost six weeks beginning in June, was scheduled to close again for another five weeks, beginning on Aug. 29.

But Mr. Wentzell said that shutdown has been put off for a week due to a new order and may result in only four weeks of downtime.

Headquartered in Montreal, AbitibiBowater operates nine paper mills in Quebec, four in Ontario and one in Nova Scotia. It closed its mill in Newfoundland and Labrador last winter and a New Brunswick mill in 2007.

Mr. Wentzell said operations in Nova Scotia and Ontario have borne the brunt of recent shutdowns.

The company plans to close two newsprint lines in Thunder Bay indefinitely by next week unless it gets worker concessions.

He said many people in Queens County believe that the company’s Quebec mills, which employ 7,500 of its 10,000 Canadian workers, may be getting preferential treatment because the Quebec government guaranteed a $100-million loan in April that allowed the business to continue to operate.

"They’ve denied that, but do the math," he said.

Mr. Wentzell said AbitibiBowater told the union that mill contracts belong to the company, not to individual mills, and can be transferred to other operations within the corporation.

"We go down and our orders go to Quebec."

AbitibiBowater spokesman Jean-Philippe Cote denied the allegation that Quebec mills were being favoured over other company operations when it comes to downtime.

"It’s ridiculous," he said Monday in an interview from Montreal, noting that the Quebec government hasn’t lent the beleaguered company any money.

"It’s a loan guarantee, not a loan," he said.

Mr. Cote said the company has a "global approach" to operational shutdowns.

David Coles, the union’s national president, said last week he didn’t think the Nova Scotia mill would survive AbitibiBowater’s restructuring.

That prediction surprised Mr. Wentzell, who said the company hasn’t indicated what operations it might close.

He suggested, however, that the Brooklyn mill will probably have to find a new partner.

He called the mill a viable operation with a number of assets, including extensive woodland holdings and close proximity to the Port of Halifax.

"I don’t know how (AbitibiBowater) is going to survive," he said.

( berskine@herald.ca)