Workers threaten strike at Longview paper mill

KapStone Paper and Packaging Corporation imposed its own terms Aug. 10 on about 800 paper mill and box plant workers in Longview, Washington — one week after it declared an impasse following 15 months of bargaining. Association of Western Pulp and Paper Workers (AWPPW) Local 153 president Kurt Gallow says the union is preparing for a strike.

Workers at the complex, formerly Longview Fibre, have voted three times to reject company contract offers, twice to authorize a strike, and even gave a 10-day strike notice in June. But as of now, they’re still on the job.

[pullquote]There’s a big difference between what the members think they deserve and what the company is offering.” — union president Kurt Gallow[/pullquote]Kapstone, based in Chicago, acquired Longview Fibre in 2013 for $1.03 billion. The company takes its name from its founders, Roger Stone and his son-in-law Matt Kaplan. Business is booming. Stone and Kaplan made $2.5 million each last year, and company stock reached an all-time high on Feb. 23, 2015. In June, Kapstone announced it’s purchasing another competitor, Victory Paper of Texas, for $615 million. Longview employees are working up to six 12-hour shifts a week to keep up with orders.

The Longview workers made huge concessions in their last union contract, which was bargained with Longview Fibre during the depths of the recession: They agreed to terminate their defined benefit pension plan, give up retiree health insurance benefits, and accept annual raises of 0, 1, 1, and 2 percent. That four-year contract expired May 31, 2014. With business having recovered, the workers are in no mood to accept further concessions from Kapstone.

“There’s a big difference between what the members think they deserve and what the company is offering,” said union president Gallow, a millwright at the paper mill.

Kapstone’s final wage offer is a 2 percent increase per year for eight years (except for a 2.5 percent increase in the sixth year). But the company’s health insurance proposal amounts to a cut, Gallow says. Kapstone wants to replace its current generous full-family plans with high-deductible versions in which some or all of the deductible would be paid from a company-funded Health Savings Account.

Kapstone says its health insurance proposal is intended to avoid triggering Obamacare’s so-called “Cadillac” tax. For unions, the tax is the most hated feature of Obamacare: Starting in 2018, the amount of an employer-sponsored health insurance premium that exceeds $10,200 for an individual plan or $27,500 for a family plan would be taxed at the rate of 40 percent. Currently, Kapstone’s full-family coverage includes an office visit co-pay but no deductible or co-insurance (in which the insured pays a percentage of the bill). That costs $2,065 a month per employee, or $24,780 a year, and — projected to rise 8 percent a year — would trigger the Cadillac tax in two or three years.

Union members object to other elements of the company’s final offer as well, including:

• An end to the right to transfer from the box plant to open positions in the paper mill (work is harder and pay is lower at the box plant)
• Changes to short-term disability coverage: Employees formerly got 50 percent of base pay for up to 52 weeks in event of major illness; KapStone is increasing the benefit to 60 percent of base pay, but limiting it to 26 weeks.

With Kapstone imposing its terms, the proposed wage increase takes place immediately, but the insurance changes don’t take effect until Jan. 1. Kapstone’s final offer also included a $2,200 contract ratification bonus, but that won’t be paid unless the contract is ratified.

AWPPW reported that 68 percent rejected the company’s final offer in the most recent vote, July 22.

In the event of a strike, Gallow said he expects Kapstone will attempt to operate the mill using managers from its three other mills, but he predicted the company will have trouble finding replacement workers.

“Most of the jobs are highly skilled,” Gallow said. “You don’t just walk in off the street and make paper.”

Workers at the facility last struck in 1978.