Monday, May 12, 2008

Magog’s World Crumbles

Bitterness and recrimination follow when Quebecor World closes down the town’s most important job provider

Alex Roslin
Saturday, April 19, 2008
The Montreal Gazette

Pierre Goulet had a feeling something was up when he went to work at the Quebecor World printing plant in Magog on Monday, March 31.

He never imagined the bright chilly spring day was his last working at the plant where he had been hired 27 years before as a lift operator at age 16—the first and only job he had ever had.

Instead, what he expected was the beginning of bargaining season on a proposal a new union contract. The existing contract was set to expire in June, and Goulet, the husky 43-year-old president of the plant’s union, was the man who had to negotiate a new one on behalf of the plant’s 380 employees.

To say things were up in the air was an understatement. Quebecor World had filed for bankruptcy in the midst of a financing crunch, the slowing U.S. economy and a soaring loonie.

What’s more, the company had just lost a big contract with Rogers Communications Inc. involving 70 titles like Chatelaine and Maclean’s.

The math was simple, and Goulet was under no illusions. “There is less product to print, and we had too many printing presses. We know that,” he said over a beer in a café in the community of 24,000, which sits on the shore of picturesque Lac Memphrémagog at the foot of the Mont Orford ski hill.

Just the same, Goulet was hopeful the contract talks would go well. The lost printing jobs weren’t handled at Magog, and the last two contracts in 2001 and 2006 had been negotiated amicably, he said.

In fact, the Magog plant was anything but a hotbed of union-management strife. It was widely known in the community that labour relations at the plant were excellent. The union rarely filed official grievances, and everyone seemed to get along like family.

In many cases, family is exactly what they were. Goulet’s wife worked at the plant 25 years as a press feeder. His two brothers had gotten jobs there after being laid off at other plants in the region that had closed in recent years—part of a wave of 2,000 manufacturing job losses to hit the community of 24,000 in the past three years.

A dozen other members of Goulet’s extended family also worked there. “Almost everyone was the same. It was a family at Quebecor World Magog.”

Many employees had been at the plant since the beginning in 1971, when Quebecor Inc.’s founder, the late Pierre Péladeau, built the ultramodern Magog facility, enabling his then-fledging firm to land its first U.S. magazine printing contracts and helping to launch the company as a media conglomerate.

With good salaries by standards in the region—averaging $17 to $18 an hour—Goulet said, “It was the job in Magog. We would tell people, ‘Hey, I work at Quebecor.’”


That Monday morning at the plant, Goulet sensed something was wrong right away. The normally cordial managers seemed to be avoiding him.

Finally, he was invited into a room where senior Quebecor World executives told him the plant was closing. “When?” he asked. “Immediately. We’re in the middle of stopping the equipment.”

Goulet headed to the cafeteria, where the rest of the employees had been gathered and told the news. Some came up to him later and wept, he said. “It was a very painful day to see people 50, 55 years old come to your office and cry.”

The news hit Magog like an avalanche. “They had good salaries,” said Yvan Morin, a Magog electrician whose father used to work for the plant as a subcontractor.

“People are talking about it a lot, especially with what’s happened lately with the other closings. It just doesn’t end.”

Luc Lepage, a vice-president at the Magog Ford dealership, said one of his employees has two kids who lost their jobs at the plant and 30 to 40 of his clients worked there. “It’s hard for them to stay in the region and find a similar job,” he said.

“It affects us much more than the closing of a tourist operation, where there are a lot of minimum-wage jobs. We need something else to support the economy or we will transform slowly into a town only for retirees, which is already what’s happening.”

At a Subway restaurant neighbouring the plant, where many employees were regulars, employee Jonathan Leclerc said only a handful have popped in since the closing. “I know some people are disappointed and others are angry because the company didn’t give any notice. People learned about it that morning,” he said.

The next day, Magog Mayor Marc Poulin held an emotional press conference at which he said he was “extremely frustrated” with the company. He said the Memphrémagog regional development centre, of which he is president, had tried unsuccessfully to meet Quebecor prior to the closing in order to discuss ways to help the plant financially. He said the offer had been rebuffed.

“Pierre Péladeau, who believed in Magog, today must be turning in his grave and crying,” he said.

“The first reaction was a feeling of desolation and eventually frustration toward the company,” said Denis Roy, a retired RCMP officer who is interim president of the 400-member Magog-Orford Chamber of Commerce and Industry.

“They didn’t respond to the community.”

Two days after the mayor’s press conference came a sharp retort from Pierre Karl Péladeau, the son of the Quebecor patriarch and currently president of Quebecor Inc.

In an open letter to the mayor published in the Sherbrooke Tribune newspaper, “I was surprised to read and hear your comments,” he wrote. “Your references to my father are in bad taste.”

Péladeau went on to blame the closing on the plant’s union. The company had approached it in 2004 and 2005 in order to renegotiate the union contract. In exchange for upgrading an older printing press, he wrote that the company had wanted to cut the number of operators at the plant’s four printing presses.

“The union didn’t want to hear about it. Faced with this refusal, the managers of the company decided to make the investment elsewhere where it would be profitable,” he said.

“You would have rendered a much greater service to your community if you had used the prestige and influence of your office to denounce the organizations that render it impossible to make the investments essential to the survival of our businesses.”

Péladeau also said it wasn’t true that the company had ignored the community, noting that the plant’s director, Patrice Asselin, had indeed met the head of the regional development centre, Ghislain Goulet, to discuss the community’s suggestions.

Péladeau’s missive set off another bomb in the region. Ghislain Goulet (no relation to the union boss) retorted that the company didn’t respond to any of the community’s proposals.

“They didn’t look at solutions before closing the plant. The plant hadn’t seen much investment in years. We were open to discussing technological assistance, tax credits, acquiring the building and renting it back to Quebecor World,” he said.

“Both sides—management and the union—told us labour relations were very good. That’s why we were so surprised by Mr. Péladeau’s letter.”

Back at the union, Pierre Goulet said he was devastated. He said the company hadn’t needed the union’s permission for the proposed layoffs.

As well, he said other Quebecor plants that had attempted to reduce the number of operators on the printing presses had found themselves with manpower shortages.

“Because they couldn’t lay off a few people, they laid off nearly 380?” Goulet asked in disbelief. “They needed an excuse.”

What also irked Goulet was media coverage suggesting the Magog plant had been inefficient and aging.

In fact, he said, only one of the plant’s four presses needed an upgrade, while low employee turnover over three decades had honed a skilled workforce. Many employees had been proud to share their knowledge within the company, he said, with 20 percent joining various workplace committees devoted to improving operations.

“The company’s most productive plant in Quebec is Magog, even with our older equipment,” he said.

“If they had said it was the economic situation, that would have been fine. But what makes people in Magog feel bad was to hear we were unproductive and obsolete. If they are bankrupt, it’s not because of the workers. The management is responsible for keeping the company afloat, and they didn’t have the vision.”

Quebecor World spokesman Tony Ross refused to comment on the Magog plant’s productivity level, saying only that the closing wasn’t related to productivity or any lost printing contracts. “It was part of a retooling and restructuring program that was started three years ago.”

He also praised the plant’s employees. “It was a very good workforce at the Magog facility. If there are openings at other Quebecor World facilities, we will consider hiring them.”

Ross wouldn’t say whether other plants will be closed as part of the restructuring, but noted the process will be completed this year.


After Péladeau’s letter, Goulet called an assembly of the plant’s union members. Now, he didn’t know if the close-knit town would pin the closing on him. “I have to see them every time I go outside in Magog,” he said. “My whole family lost their jobs. That’s a lot of pressure.

Nervous, he arrived at the community hall two hours early in order to prepare his speech. “I wanted them to be proud of what they had done, so they could walk with their heads high.” He said the meeting went well. “Working for these people was my honour.”

Meanwhile, the Quebec government has responded with a $1-million fund to help the local economy.

But days later, there was more bad news for the community when reports suggested CSBS, a 100-employee bed linen manufacturer in Magog that is also under bankruptcy protection, was now unlikely to reopen.

Goulet said he is optimistic employees have the skills to find new jobs. But most will have to leave Magog to find decent salaries, he said.

Goulet, who has been appointed to a local “revival” committee exploring ways to revive the region’s economy, is himself thinking of moving to Montreal with his wife and three kids to find work.

“I don’t know what will happen with the village of Magog.”

[TAGS: Magog, Quebecor, Eastern Townships, Pierre Péladeau]

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