Finnish labour unions outraged at moving Stora Enso orders to Sweden

Paper workers’ Petri Vanhala faults state-owned company for running after cheap currency

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The announcement by forest industry company Stora Enso that it will move some of its production of paper and sawn timber from Finland to Sweden has angered Finnish labour unions.
      Stora Enso CEO Jouko Karvinen announced last week in the Swedish financial journal Dagens Industri that as much production would be moved to Sweden as possible, because of the cheap Swedish currency and the low price of raw timber in Sweden.
     
Karvinen had not modified his stance on Friday, even though the Paperworkers’ Union, the Union of Salaried Employees (TU), and the Union of Agricultural Producers and Forest Owners had all reacted strongly to the Stora Enso action.
      “When there is clearly less demand than capacity, orders have been moved, and are being moved, to more cost-efficient production units. Orders are being channelled to units where the best profitability can be achieved in this difficult situation”, said Karvinen, who was reached at his company’s London offices.
      Karvinen feels that everyone involved should admit that “we have a problem”, and that “the situation is difficult”.
     
In some grades of paper, orders have been moved from Finland to Swedish mills, and orders from Finnish sawmills have been also moved to Sweden.
      Russian sawmills are also producing more products than in Finland, due to the high price of wood in Finland. Some orders from German factories have also been moved to Sweden, and some orders have gone to Belgium.
      “People are very disappointed, sad, and depressed”, said Petri Vanhala, secretary of the Paperworkers’ Union.
      According to Vanhala there have been questions from the union’s rank-and-file of possible industrial action.
     
“There are no decisions on industrial action at the moment. Everything is always possible, but it is better not to speculate on these things right now."
      Vanhala noted that there have been temporary layoffs at Stora Enso facilities already before this blow. Of the company’s 11,000 employees, at least 5,000 are to be made temporarily redundant in the spring.
      “People are looking for common ways to save money at the local level. After this, the foundation of all long-term development falls away.”
     
Stora Enso employees are also disappointed the Finnish state is not intervening.
      “The state continues to own a large amount of Stora Enso shares. It seems strange that a state-owned company would go after cheap currency in a situation when there is an economic crisis in the country. Is the state using its decision-making power in any way? [Jyri] Häkämies is responsible”, Vanhala thundered.
      Vanhala notes that the government of Prime Minister Matti Vanhanen (Centre) has “specifically repeated the need for responsibility on the part of companies”.
     
Aides for Minister of Defence Jyri Häkämies (Nat. Coalition Party), who is responsible for government policy in companies in which the state has a holding, indicated on Friday that Häkämies is not the right target for the complaints.
      The one responsible is Kari Järvinen, CEO of Solidium, the state company that deals with state corporate ownership.
      On Friday, Järvinen indicated that non-interference in such matters was a basic starting point.
      “Decisions on production are the responsibility of the company’s board and operative management. We cannot help the fact that the Swedish krona is weakening. The krona has declined already by 20 per cent, which gives Swedish industry a big competitive advantage”, he said.
     
The Swedish Paperworkers’ Union has not yet formed an opinion on the dispute between Stora Enso and the Finnish Paperworkers’ Union.
      “We know nothing more of this than what we have read in the papers. We have not been contacted by unions in Finland”, said Jan-Henrik Sandberg, chairman of the Swedish Pappers union, which represents paper workers in Sweden.
      “Nowadays it is common for industry to move production to where activities are cost-effective. We need to become more closely acquainted with the situation, and preferably to discuss the matter with Finnish colleagues.”
      Sandberg notes that if there were a strike in Finland, the Swedish union would see to it that the strike cannot be circumvented by moving production to Sweden.


Previously in HS International Edition:
  Weak krona and cheap wood prompt Stora Enso to move production to Sweden (19.3.2009)

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