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Unifor targets Resolute Forest Products to set pattern in contract talks

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MONTREAL - The head of Canada's largest private-sector union wants to incite a debate about the future of the forestry sector and regain ground lost by workers during the recession in its first major round of bargaining this spring with Resolute Forest Products.

"There's no question that we're going to talk about reversal of concessions," Unifor national president Jerry Dias said Friday after choosing the Montreal-based company as the lead firm in contract talks in the Eastern Canadian pulp and paper industry.

The Canadian forest sector was ravaged following the financial crisis as closures cut employment nearly in half to 230,000, devastating many communities.

"It's about damn time that we had a discussion in Canada about how we take advantage of our own natural resources and raw materials and put in a place an economy and a system to put young people to work," Dias said.

Negotiations with Resolute (TSX:RFP) will help establish a pattern agreement for some 10,000 Unifor members at companies across the sector in the eastern part of Canada.

The union said its priorities will be "economic improvements, including benefits and job security enhancements."

Negotiations with Resolute will begin in mid-March and be followed by talks with an unnamed target among producers in Western Canada.

Dias said the industry has returned to profitability and the union will ask companies to acknowledge the contributions made by workers during the crisis, including helping to take some companies like Resolute, formerly known as AbitibiBowater, out of creditor and bankruptcy protection.

Workers at Resolute saw their ranks slashed by roughly 40 per cent, gave up a 10 per cent wage cut and made changes to their benefits and pensions to help the company in its restructuring.

Dias expects negotiations will be difficult, but said the union selected the newsprint, pulp and lumber producer because it's a large and stable company.

"They have a long history, they understand exactly that we're going to bargain solutions and we just hope they understand our determination."

Resolute didn't immediately return requests for comment, but CEO Richard Garneau said Thursday the company was preparing for the negotiations.

"I think our union partners know it's a business that is declining and they understand quite well the difficulties that the industry is facing," Garneau said in an interview.

Analyst Paul Quinn of RBC Capital Markets said that while Resolute cut wages by 10 per cent, it kept pensions intact even when many newsprint competitors failed to do so.

"They've been actually pretty good to their employees in that respect," he said, calling pattern bargaining a "crazy notion."

"It sets up situations where both sides get their dander up and you get strikes and people aren't logical and looking at how much money that business can afford."

Tony Faria, a University of Windsor professor who specializes in the auto sector, said pattern bargaining fails to recognize the differences among companies.

While Unifor's predecessor, the Canadian Auto Workers, insisted on pattern bargaining with the big U.S. automakers, the UAW didn't stick to the concept so strictly. The result is that more workers are being hired by the Detroit 3 in the U.S. than in Canada, he said.

Unifor was formed by a merger of the CAW and the Communications, Energy and Paperworkers Union of Canada.

It has more than 300,000 members across Canada, including about 19,000 in the forest sector.

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