Union and company officers at Smurfit-Stone Container Co. mill in Hodge continue in negotiations for a new labor contract, following a recent vote by union members to authorize a strike if recommended by the union committee.

Union representatives and the local company plant manager each said their desire is to reach an acceptable agreement.

David Broussard of Ruston, staff representative of United Steel Workers, told The Piney Woods Journal the union members have "voted overwhelmingly" to authorize a strike if the committee elects to call it. However, he said, a strike is the last resort, and is "not even on the radar screen" at the present time.

Mill manager Michael Entz said he was constrained by legal counsel not to discuss the matter publicly, except to issue the following brief prepared statement: "We are actively engaged in the negotiations of a new labor agreement. Therefore it is inappropriate to comment on the ongoing process. It is our hope and desire that the process will conclude with an agreement acceptable to both parties."

Broussard said the company recently made what it called its "last, best, and final offer" of terms for a new labor agreement, and the offer "is still out there." Work at the mill is proceeding under terms of the prior labor agreement which expired in July of this year, and which continues in force until either side issues a formal 10-day notice of cancellation. Neither side has given notice, while discussions continue.

According to Broussard, the company, "in a cost cutting mode," proposes elimination of certain retirement benefits, retiree health care, and other benefits. "Relations have been on good terms, and continue to be," Broussard said, however, workers object to cost cutting at the expense of employees.

Within the past three months, the company offered early retirement packages to employees who qualified, and several took the deal, according to other sources.

The mill staff includes approximately 530 workers in the bargaining unit, plus another 100 to 150 salaried employees not covered by the union contract.

Smurfit-Stone Container Corporation, headquartered in Chicago, is in the second year of a three-year "strategic plan" begun in 2005 to increase sales, reduce costs, and increase profits by 2008. The company continues to operate at a loss, although the third quarter of 2006 was profitable, according to its financial report.

Sales for 2005 were $8.4 billion, up slightly from the previous year's $8.3 billion. For the full year 2005, the company reported a net loss of $339 million, compared to the $57 million in 2004. The 2005 loss included $321 million in restructuring charges related to closure of mills and packaging facilities.

The financial report includes a statement from Patrick J. Moore, chairman, president, and CEO, which says in part, "As American manufacturers moved production offshore, they also sourced their packaging requirements offshore. We saw the big-box retailers increasingly pushing their influence further along the supply chain in their persistent focus on driving out costs of production and distribution."

As a primary manufacturer of industrial and consumer goods packaging, Smurfit-Stone has faced the need to modify its product lines to meet the demands of new consumer products while staying on course for reducing its own costs of production company wide.

CEO Moore said, Lowering our cost structure is a first priority. Our target is to produce annual cost savings of $600 million by 2008, compared to 2005 when we launched our strategic initiatives. In August we eliminated an additional 700,000 tons of capacity by closing two high-cost mills in Canada, and permanently closing one of three paper machines at our Fernandina Beach, Florida mill."

Local Smurfit-Stone management has said there has been no plan so far threatening a closure at the Hodge mill, although two years ago, the related kraft bag plant was closed and the equipment sold.

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