According to CEO Jussi Pesonen, the printing paper business “will have to start painful cost-saving programs” due to the permanent devastation caused by the strike.
UPM: n managing director Jussi Pesonen commented on the ongoing industrial action situation at an extraordinary level during the company’s earnings announcement.
The employees of the Paper Association’s UPM pulp and paper mills and biofuel refinery are on strike because UPM stopped complying with the old collective agreement at the turn of the year after it expired.
The company is demanding the conclusion of business-specific agreements on a completely new basis. The Paper Association wants to negotiate a company-specific agreement on the basis of the old agreement. The strike has been going on for a month.
Thursday Pesonen both promised investments if industry-specific agreements were reached, and on the other hand threatened cuts, especially in the loss-making printing paper business, if the strike continues.
“We have to start painful cost-saving programs. Let’s start planning these now. This strike will not help the survival of the units in Finland. Every day wreaks havoc on both the customer head and the business, ”Pesonen said.
According to him, the company will lose customers, market share and revenue due to the strike. The company has not wanted to disclose the extent of the loss of income to the public.
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“In the fall, I didn’t even think we had to think about these things.”
Losses According to Pesonen, it must be replaced by savings in the short term. At the same time, UPM is calculating where printing papers are worth making at all, when the market is shrinking at an annual rate of about five percent.
“In the fall, I didn’t even mind having to think about these things. Now we have to consider where the paper machines and mills are in the long run. ”
In practice, Finnish and German paper machines compete for existence. In Germany, for example, although electricity has recently been more expensive than in Finland, the country’s industrial policy is attractive to large companies.
“Germany, for example, reimburses 75% of the costs of emissions trading and reimburses the online fee wholly.”
Paper union the strike does not affect other large forest companies, as they signed company-specific agreements with the Paper Association last autumn.
According to UPM, its business areas are so diverse that they have to obtain different agreements to ensure their future success.
In December, UPM entered into business-specific agreements with the Confederation of Finnish Industry in the plywood and sawmill businesses.
On Thursday, Pesonen praised that the agreement creates good conditions for plywood factories to be competitive, and one production plant has even decided on a large replacement investment.
UPM: n has often been criticized for the Finnish investment environment, but on Thursday Pesonen painted a bright future for the company’s Finnish units and businesses – if only business-specific agreements can be reached.
However, the company’s decision on the location of the biofuel refinery, announced on Thursday, sent a message in the opposite direction. The refinery will be built in Rotterdam, the Netherlands, if it is built at all.
According to Pesonen, Rotterdam beat Kotka due to, among other things, transport costs, taxation and also security of supply.
Pesonen on the other hand, he painted threatening pictures of what would happen if working conditions that pleased the company could not be agreed. Threats are not limited to paper machines.
Pesonen said that the company’s large pulp mills in Kaukas and Pietarsaari will soon have to make major renovation investments. He also suggested that the fate of the investment and perhaps the entire factories now depends on the outcome of the negotiations.
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According to UPM, employees are promised to maintain their earnings levels at least unchanged.
The words of the warning even extended to the future of Raflatac, a manufacturer of sticker products with excellent results.
“We have development projects in mind there too, but any permanent damage that comes to the customer head and deliveries will affect future solutions.”
Pesonen exceptionally opened the company’s employee benefits at the press conference.
According to UPM.
UPM promises permanent employee benefits for five years.
Pesonen said that UPM will also pay incentive bonuses to strike employees for last year’s results. Approximately EUR 30 million of the total prize pool of EUR 60 million will be paid to Finland.
“Even though we are in such a difficult situation, the factory workers still receive an average of € 3,000, the chief shop stewards € 3,500.”
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