FRIDAY FEBRUARY 10, 2006

PULP-PAPER MERGERS INEVITABLE
The Canadian pulp and paper industry’s return to profitability resides in its ability to consolidate, to merge Canadian companies to form world-class contenders, stated Russell Horner, CEO of Catalyst Paper Corp., at this week’s PAPERWEEK INTERNATIONAL 2006 FORUM in Montreal. Horner contends laws governing the Competition Bureau have to reflect reality – such as the fact that Canada’s largest forestry company is only 21st in the world – while costly overlapping regulations and other “negative subsidies” have to be removed. “The world is our market, not this country. And the world is our competition and we have to be big enough to play on a world scale,” said Vancouver-based Horner, noting that size attracts vital capital investment and enables risk taking expansions. He added that there are going to be fewer (and) bigger companies. “We can’t save every mill, but we can be intelligent about how we rebuild the Canadian industry.”

In his remarks to the forum, James Lopez, CEO of Quebec-based Tembec Inc., maintained if a rebuilt forestry industry is to be a competitive force, its members must be allowed “to right-size the industry.” Much of the export-dependent industry’s troubles are linked to a rising Canadian dollar and higher energy and material costs. John Weaver, CEO of Abitibi-Consolidated Inc., said the forestry sector needs a stable business climate. Montreal-based Abitibi has been at the forefront of shutting down newsprint capacity in a bid to bring supply in line with constantly dwindling demand. He noted:
“Not many industries could survive a 30 to 150 per cent increase in operating costs.”
Read more: lmoore@thegazette.canwest.com

GOVERNMENT APPOINTMENTS
The following appointments will be of interest to NAMMU members:

The Honourable Lawrence Cannon, Minister of Transport, Infrastructure and Communities, also assumes the role of Minister Responsible for Canada Post Corporation, as well as the Royal Canadian Mint. Minister Cannon is a first time member of parliament at the Federal level, elected in the constituency of Pontiac, Quebec. He is a member of the Operations Committee, Economic Affairs Committee.

The Honourable Beverley J. Oda, elected in the constituency of Durham, Ontario, is appointed Minister of Canadian Heritage and Status of Women. Minister Oda was first elected in 2004 and has served as the Critic for Canadian Heritage and also been a member of the Standing Committee on Canadian Heritage.

The Honourable Jean-Pierre Blackburn, elected in the constituency of Jonquiere-Alma, Quebec, is appointed Minister of Labour and Minister of the Economic Development Agency of Canada for the Regions of Quebec. Minister Blackburn was first elected to Parliament in l984, re-elected in 1988.

ARBITRATION DECISION – QUEBEC MAIL PROCESSING PLANT
A recent ruling by arbitrator Guy Dulude in response to a grievance filed by the Canadian Union of Postal Workers (CUPW) will not impact Canada Post’s decision to close the Quebec City mail processing plant. According to a Canada Post media release of February 2, the issues raised in the ruling require Canada Post to make some minor adjustments in terms of timing of the multi-phase project but will not delay the final completion date. More information, click here.

GE MONEY BUYS HBC CREDIT CARD DIVISION
Hbc has agreed to sell its credit card division to GE Money, a unit of General Electric Co., for reported net proceeds of $370 million. Recently, the Hbc board of directors unanimously endorsed U.S. businessman, Jerry Zucker’s, estimated $1.7-billion bid for Canada’s largest retailer and oldest corporation. The sale of the credit card division had been launched by the current management. The agreement includes a 10-year alliance in which GE Money will provide Hbc with credit, marketing and analytic support, as well as credit servicing and customer care for the retailer’s 3.1 million retail cardholders. Hbc will transfer 650 employees to GE as part of the deal. Performance payments from GE Money will be based on the level of credit sales, new accounts and new product introductions, which reportedly could include a co-branded credit card.

A prior Hbc deal to create a co-branded card with an unnamed bank was cancelled as part of the GE Money agreement. Net proceeds of the agreement do not include a $50-million break fee Hbc will pay to that bank which had a first right to match any offer received by Hbc for its credit-card business.

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eView is the electronic bulletin of the National Association of Major Mail Users highlighting issues of interest to business mail communication and delivery professionals. Content: KMR Group. The information contained in eView is obtained from various sources and believed to be reliable but accuracy cannot be guaranteed.