PAGE A4, THE HERALO, Wednesday, March 30, 1977

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635-6357

An Award Winning Weekly
Published by Sterling Publishers Ltd.

Published every Wednesday at 3212 Kalum St., Terrace, B.C. A member of Varilied Cir-

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Costs can kill you - Canada

ADDRESS BY BERND K, KOKEN
PRESIDENT, ABITIBI-PRICE LUMBER LTD.

; TO THE

: 69TH ANNUAL CLA CONVENTION |

> "Costs can kill you, Canada!" Consider this likelihood.
Think about it, Ask: Could this really happen to us? In this
country? In this day. and age? With all the planning for a
richer, fuller life that is so synonymous with our modern-

majority of our industry is struggling along far below that
level, Uncompetitive in cost. Losing money. Slowly going
down the drain.

What's the reason? Well, it’s twofold. To start with,
southern mills are newer and more modern. This makes
them less labour-intensive than Canadian mills in the east.

And then, there is attitude. In visiting my company’s U.S.
plants, I detect a greater commitment by workers to the job

‘to all concerned? .

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70st!

Regressive policies

Mr. C. Shelford, MLA
Dear Sir: ;

1am writing to protest the
regressive policies of your
government in the area of
early childhood education. I

ving the District of Terrace
an

waiting list. Yet, in spite of
this enrollment, our school
is having great financial
difficulty, not through any
mismanagement of funds
but solely due to the lack of
government support for this
valuable community
resource. Recently we have
hadto lay off one of our staff
in order to keep our doors
open.

Unlike .most schools we
rely on the fees which are
paid by the parents. Many
parents are subsidized by

subsidy. The rate has
remained the same for a
number of years while costs
for materials, space and
salaries have risen. Fur-
thermore, the government

education for our children.
- Unless there is a major
change in the attitude of this
government toward early
childhood education, this
school and many others like
it throughout the province
will be forced to close and
this community will be
much poorer for the loss. I
urge your government to
consider the role of early
childhood education in our
community and its place in
the total education system
in this province,

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SSSR

Tanker route

Sam Bawlf., Minister
Ministry of Recreation and
Conservation
Dear Sir: -

It is our understanding
that the Fish & Wildlife

the form of a map entitled
“Northern B.C. Coastal
Wildlife Resources Map”.
Other material consists of
departmental deficiency
statements on KPL’s sub-
missions to the National
Energy Board and TERM-
POL

We think it important that
such information he
disseminated to the public,
particularly as the stakes of
the northwest coast are
high. We would ask that this
material be released as soon

resource agencies do not
seem to be considering
appearances before the
Thompson hearings.
Although the decision may
be out of provincial hands,

z culation, Authorized as second class mall. Registration number 1201. Pastage paid in cash, 2 . : am the Su : ‘
Ps 3 pervisor of the doesnot support this centre Branch has recently as Mr. Davis seems to
= return postage guaranteed Ba Is if fair to all Lazelle Pre-School, the only with any kind of main- compiled certain  in- suggest, the province will
Pa e non-profit pre-school ser- tenance grant. The net formation related to marine have a large part of its
EDITOR PUBLISHER = ‘ane . result is that even at resources on the. tanker coastal resources jeopar-
PAT O’/DONAGHY GORDON W. HAMILTON } Will it build GOOD the surrounding area. capacity enrollment approach route for the dized by the Kitimat
“te wie and BETTER our school is presently (established by licence) the proposed Kitimat: project. the branch

e enrolled to capacity and we school cannot continue monton of] pipeline. ecause the branc

NOTE OF COPYRIGHT ee R DSHIPS? have had to establish a provide an adequate level of Some of this materialis in represents the interest of all

British Columbians in our
wildlife it would seem that it
should be pursuing policies
of protection and con-
servation. We have to rely
on the branch to ensure that
our wildlife resources are
not endangered by such
projects as the Kitimat
pipeline. We. hope that you
will recognize the need and
importance of a Fish &
Wildlife Branch submission
to. the Thompson Inquiry
and seriously consider
having the branch intervene

day economic system? to be done. Attitudes that are much more in tune with the ‘the Department of Human Yours trul as possible, particularly so in this process.

: Ladies and gentlemen, if you answered yes to all of these, _plant’s goals. Less emphasis on the adversarial system so Resources at a fixed Mary MeNairnay that it canbe incorporated B

you share with me my concerns. We're in this together! in vogue in Canada these days. ; oy monthly rate, This ob- Supervisor in submissions to the N.E.B. Sincerely

: IT needn’t tell you that Canadian industry is in trouble. These attitudes result in better housekeeping, improved viously sets a maximum Lazelle Pre-School and the Thompson Inquiry. Hank Lavertu

That we are costing ourselves out of our markets. Par- safety, less down time, less absenteeism and better work- rate for those students 4907 Lazelle Ave. We are also deeply con- For the Kitimat Oil
ticularly out of the huge market south of our border— our manship. All this adds up to higher productivity. Terrace, B.C. cerned that the provincial Coalition

most important.

Another problem. What can we do to raise productivity in

whose parents receive no

The lumber business in eastern Canada isnoexception.In eastern Canadian sawmills? * .

fact, it could be in even worse trouble than other industrial Well, to begin with, we must use our available cash . P i Pp el ine

sectors. resources to update and automate our mills more and more. Meth ano | f rom woo d "

: If I were standing before you seven years ago — at the Make them less labour-intensive. Though my company is Dear Mr. Bowen- I simply cannot un-
62nd Annual CLA Convention — I would probably be ad- completing construction of a new integrated sawmill this The Editor higher wages were ob- Colehurst: derstand people in our
dressing you on the subject of ‘The Decade of Marketing”. year, I can assure you that the next new installation will not Dear Sir: tenable in eer industries Thank you for your letter government who would
You surely remember that's how we locked upon the 1970's. considered for many years — until our older mills have We thank you fordrawing Even today, there is a * of January 4 concerning the contemplate such a project
With high expectations for an extended age of prosperity. been modernized. ¥ g Ys 1s Some proposed Kitimat pipeline. for the sole purpose of

With an over-abundance of resources and a growing world-
wide demand for Canada’s materials and goods, we thought
we had the world by the tail, didn’t we?

‘ So why have our priorities changed? Why am I asking you
today to facus your altention on costs rather than on market
research, sales strategy and price elasticity? Because the
ravages of Canada’s double-digit inflation in the mid-70's

has pushed our costs of producing lumber far out of line making of decisions that directly or indirectly affect their sentfor a copy ofthis report. or as summer employment ionoyrable Romeo ‘
with our major competitor. own workplace and lifestyle. ; - di We have already | con. for students or groups Of JeBlanc, the federal abo et pecoming concerned
- If our cosis are allowed to rise faster than our com- § Weas managers are more productive when weare happy. SUC P fe emp oye. ‘Minister of Environment. Canadian responsibility for

petition’s, we will become a marginal supplier of lumber to
e U.S. market. This means that our mills will be the first
to close in a falling market and the last to reopen in a rising
market.

‘ With today’s costs, the average Ontario or Quebec
sawmill cannot compete with its counterpart in the
southern U.S, And why do I pick on the southern industry as
my target of comparison? ve

. Although the lumber industry in the Pacific northwest is
long established, the U.S. south is the new force to be
reckoned with. They have the raw material. They have the
human skills. They are close to the market. Southern
slumpage fees are much less than in the Pacific northwest
and their labour costs are some 40 percent lower.

: To confirm the importance of the south, 1 quote Mr.
Robert B. Pamplin, Chairman of the Executive Committee
of Georgia-Pacific, as follows: “Most of our timber growing
lands and plant facilities are located in the south which is
the area nearest the market and with the best future of any
other area in the United States. In fact, 70 percent of our
operations and profits are coming from the south today.

“ exists between eastern Canadian mills and those of

After all, who needs more lumber production? What we
need is Jumber produced at a more competitive cost.

Turning to the.human element of productivity, we must
foster better relations with employees by being more
sensitive to their needs. We must be aware that job
satisfaction, work environment, safety and so on, are im-
portant to the employees. Let's involve them more in the

Happy with our work environment. When we are en-
couraged to participate in decisions. When we feel we are
important to the well-being of our company, division or
plant..We share with our workers many of the same
aspirations. Let's redirect more of our energies from the
adversarial side of management-labour relations to the
cooperative side, We have done this in one of our sawmills
with excellent ‘productivity gains. ve

The last point I would like to raise deals with tran-’

sportation. A wide disparity in the costs of rai] shi ments
e U.S.
south,

Our per ton-mile costs of shipping lumber to major
consuming points in the midwestern and eastern states
averages four cents, This is 50 percent higher than the
southern average of 2.7 cents per ton-mile.

How does this translate into dollars? Take for example, a
point like Fort Wayne, Indiana. Fort Wayne is almost mid-
way between the concentrated producing areas of Ontario
and Quebec in the north and Mississippi, Alabama and
Georgia in the south.

our attention, in your
editorial, to the report
published by Inter Group
Counselling Economists
Ltd. on the possibilities of
roduction of Methanol
rom wood wastes. We have

investigation into
production of wood alcohol
and cedar oils from forest
materials. We have
discovered that, up to the
Second World War, and for a
few years in the late forties

: and early fifties, there were

several: portable: stills
operating in British

‘olumbia. These stills were
small units mounted on a
wheeled trailer and towed to
logging sites. Operated as a
family business, all
members of the family,
gathered up the slash and
unusable timber generated
from the logging and, right
on the logging site, boiled
down this waste and

doubt as to whether
operations such as these
would be economically
viable, however they could
possibly be utili as a
supplementary income to,
say a family farm operation

We have designs of the

of still used in those ©

pe
as and the distillation
process. Investigation dees
yet have to be conducted as
to the regulatory restric-
tions, if any, covering this
type of operation and as to
e market for the praduct.
The B.C. Forest Service
Research has carried out
some investigative research
recently into the
possibilities of utilizing the
principals of these portable
operations to dispose of
Slash as an alternative to
burning. As far as we know
they have not yet reached
any definite conclusions.
We would be interested in

I share your concern for
this proposal and have
expressed my concern
publicly to Mr. Jack Davis,
the Minister of Transport
for the province of British
Columbia and also to the

I am Chairman of the
Environment Council of
Canada which is the ad-
visory body to the Minister
of Environment, thus I hope
to be able to keep the
dangers of this ridiculous
project before those who
Will be called upon to make
the decision in the final
instance.

We must all keep up
steady pressure and letlers
to the ministers are the most
effective way of recording
aur concern. ,

taking off-shore fuel along
an extremely sensitive part
of British Columbia, across
Jasper National Park,
through the farmlands of
our prairie provinces, to an
American market.

transporting fuel for the
American public. It holds
the potential for some very
difficult international
situations. Lam well aware
that this is causing concern
within Canadian govern-
ment circles also and I hope
that ‘these . considerdtions
may help us suceéed in
having projects such as this
one stopped.
Sincerely. yours,

Ian McT. Cowan
Professor of Zoology

Directors late

Most of our future growth will alsobe in this area.” ‘Allowing for the higher weight of yellow pine from the ‘“istilled out the alcohol and pearing from anyone who he Editor, Therefore, it is my belief
- Having identified our main competitor for the U.S. south, telfvery cost of lumber om the Canadian locations ils. The boiled waste was’ worked with one’ of these Dear Sir: that money spent in con-
iumber market let me zero in on some specific problems comes in at $10 per 1,000 bd. ft. higher. This freight penalty thenreturned tothe soil and ynits in past years or saw Costly Directors Three nection with this relatively
and let me suggest some solutions to you. usually plowed in by any one in operation. Should any Hours Late’. (Herald, new level of government 1s

: By far, the most serious problem is Jabour cost. Wages
and benefits paid in logging and milling represent about 50
percent of an eastern Canadian mill’s total cost. There is no
other expense in producing lumber here that has a greater
impact on mill cost.

: You will believe we are in trouble when I tell you that the
base rate of $5.70 in a typical Ontario sawmill is 63 percent
higher than that paid in a large southern mill. Adding fringe

_ his ten dollar bill —- comes right off the bottom line of our
mills. . :

Not only are Canadian rail rates much higher than from
the south, but they also contain many inequities. This leads
me to believe that rates are based on what can be extracted
from a particular company or district. In Canada, the tough
negotiators seem to enjoy lower rates, The less determined
pay more, It is clear to me that more attention must be
devoted to this important cost element.

machinery available.

How much production of
alcohol and oil was achieved
in those years are figures
which we have been unable
to obtain, however we do
have figures which show
how much waste is needed

of your readers be in-
terested in obtaining details
of the stills and method of
production we will be
pleased to supply them.

Yours sincerely,
Rodney A. Fowler

March 23), was extremely
amusing to me and I feel
that, as a taxpayer and

_resident of the Kitimat-

Stikine Regional District, I
have a right to comment on
it.

Since their inception

to a large extent wasted,
While I do not condone the
waste of our tak money
mentioned in your article, I
do sympathize with
Directors Bal] and .Ar-
mitage in their apparent
lack of enthusiasm for.

benefits, for total employee cost, raises the disparity to 70 There is an obvious need for a more comprehensive ap- 0 produce one gallon of Chairman . several years ago, I have Regional District meetings.
percent. proach by the industry in its negotiations and dealings with alcchol or oil. . Terrace Development opposed the concept of I cannot help feeling that if
carriers. | suggest to you this need could best be filled by . These distilling operations Corporation regional districts. To my the other directors,

: How then, can we in Canada, compete with milling costs
in the south?
- An even worse situation prevails in the logging sector.
The recently concluded Ontario Woodworkers Agreement
sets a current base rate of $7.13 per hour, This means that
Ontario logging wages are more than double the southern
rates.
' The delivered log cost to an integrated mill in Ontario is
presently in the neighbourhood of $80 per 100 cubic feet.
Even with higher stumpage, a southern mill pays only $65
per cunit. Converted to lumber, this means the Ontario mill
as a $30 per thousand board foot higher log cost than its
southern competitor.
: So we have a problem, What can be done to narrow the
gap in mill and jog costs?

the formation of a joint Transportation Steering Com-
mittee.

This joint committee should draw on CLA and its sister
organizations in eastern Canada for its membership.
Among its terms of reference should be the following:

- How to minimize freight inequities within the eastern
Canadian producing area.

- Develop a negotiating strategy aimed at gradually
narrowing the gap with southern rates.

- How to encourage development of more competitive
means of transportation. :

- How to best negotiate with carriers — on a centralized or
decentralized basis. :

In conclusion, ladies and gentlemen, I remind you that we
all share in higher expectations for our couniry. We all

apparenily disappeared as
family units broke up and

R.R. 2, Douglas Rd.
Terrace, B.C. V8G 3Z9

Heritage Day holiday

Mrs. I. Campagnolo M.P.
Ottawa.
Dear Mrs, Campagnolo:
Can Canada afford
another paid holiday? I’m
referring to the proposed
Heritage Day on the third
Monday of February.

that day. Can the taxpayer
and consumer afford this?
0.

With this in mind I
propose the following:

1 Heritage Day be in
memory only and a normal
working day.

mind they are unnecessary,
costly and a threat to our
freedom. I can think of no
function of regional districts
that could not be handled as
well or better by provincial
and municipal agencies
already in existence.

Postmasters seek

chairman, etc, would forget
to show up, perhaps the
whole ill-conceived struc-
ture would collapse and we
would all feel a-sense of
mental and financial relief.
Yours truly,
Thomas Atrill

historical materia!

First, our labour costs must become more competitive share the hopesfor a brighter outlook for our industryinthe Remembering our ; The Edito
with southern costs. This cannot be done with one stroke of east. We have the skills. We have the resources. forefathers is a great thing holiday without may be a Dear Sir: " Knawizage of who ad have
the pen. It cannot be done overnight. It willtake time. More — Surely the poor performance of our industry over the past but we must remind our- “9 Heritage Day be a _‘ The National Board of the of the C.P.A.A. y aay

effective dialogue between management and unions and
employees alike must be begun. The facts of survival must
be brought home. Expectations must be lowered. Tell it like
it is.

Nor must we be disillusioned into buying industrial peace
today by settling with labour above the Anti-Inflation
regulations. Though the AIB has rolled back numerous
sawmill settlements, by doing so we are pledging ourselves

to fulfilling unrealized expectations al a later date. aregoing to stay in business. Tell your employees thefacts. made in Canada. Do you
The wage gap can be narrowed. It takes guts. It takes Be fair, but be tough. . know how many civil ser- tones U Annployees willbe aie ats] Smee ant ours truly
time. And the strength of your convictions to stay in 2, Sawlog supply should be rationalized, Talk to the vantsthereare in Canada?1. passed onto the consumers «Stories from the pioneer Historian”
business. sawmillers and logging operators in your area, Maybe the believe if Heritage Day and taxpayers days of mail handling in CPAAY
Second, more cooperation must be fostered to upgrade size or specie of sawlog at your mill can be better used at becomes a paid holiday : ‘ Canada. I am especial? Pr i Rot
’ gawlog quality in eastern Canada. The U.S. south has a big another mill. And vice versa. Upgrade to suit your equip- employers will be paying at Sincerely interested in hearing from, 105 Robinson, Ont.

advantage in log size, log quality and hauling distance.
Rationalization of sawiog supply could benefit many
eastern Canadian mills. We should work closely with our
sawmills in our areas to ensure the right kind of sawlog is
being delivered to each mill with the lowest possible hauling

couple of years points to a need. A need to make ourselves
more cost competitive. ,
This is what it's all about!
1, Our most significant problem is in high wage and
benefit costs. As a result, eastern Canada logging and
sawmilling costs are far out of line with our major com-
petitor — the southern sawmill. ;
The gap in employee costs must be gradually closed if we

ment, Cut hauling costs by rearranging sources of supply.

3. Focus on raising productivity. First, by directing
capital to mill improvements rather than to expansion.
Direct your cash resources to modernization and
automation,

selves that Canada is suf-
fering from low productivity
and high costs.
Governments too must
watch their spendings, as
last year governments, one
level or another, spent 43
cents out of every dollar

Jeast 125 million dollars for

¢

1

normal working day with
employees’ wages going to
charities of their choice.
Please consider these
facts and ideas before
making it law to have
Heritage Day a paid
holiday, A paid holiday will

Norah LeCleir

Canadian Postmasters and
Assistants Association has
asked me to compile the
history of our organization.

For this reason, I am
asking your readers to
contribute items of interest
Such as amusing anecdotes,

Johnson

All . material will be
acknowledged on arrival
and a receipt issued. The
material will be returned as
quickly as possible.

Thanking you for your’

assistance, f am,

s

Ski Shop

cost, Let's stop putting pulpwood into sawmills and sawiogs Secondly, concentrate on improving worker attitude. One ; The Editor ‘private homes in Terrace.
: into pulp mills-We should rearrange our sources of supply _ proven way is to enlist input of employees in the decisions N ew Z ea I an der cal l l ng Dear Sir: he -were allowed to
' or our limit operations to improve log quality and toreduce that affect their working lives. . ; ; develop the land it sits on,
. costs as much as possible. _ ; 4. Freight costs to our major markets are too high.Setup Dear Editor: Valley. Old friends or new: My sympathies to Mickey Mr. Johnson would have a

"In comparison with our neighbours to the south, we in a joint Transportation Steering Committee to study how _ will get a reply. Johnson. I cannot see ‘shop more eye appealing

Having left your town 16

anything wrong with his

: Canada, suffer not only from a wage gap — but also from a best to deal withcommon carriers on an industry basis. than the new sterile lump of
#8: productivity gap. Lower production per manday combined —_Lastly, we must find our voices as business people. Let's rahe a for new Zealand I Yours truly present ski shop. Tt has an buildings across the street
.4 6=s swith higher wage costs leaves eastern Canada far behind speak out clearly in behalf of the free enterprise system. tt enn So ¢ rue a Norman M. Roddy ndividuallty tne ee from him -- and many other:

: i . i . , ss of its own. Iti i ui

‘ the south in unit labour costs has dane a lot todevelop this great country. It can do muc correspondence with anyone Costa Plentee far neater thon ig own. t is ¢ om - erci ally built

* > While southern production of 2,500 board feet per manday
and higher, is common; in eastern Canada only a few of the
newest sawmills achieve this level of productivity. The vast

Ihave spoken out in behalf of issues to make our lumber
industry more viable. May I ask you to do so.also?

who cares to write and keep
mein touch with the Skeena

Paengaroa Te Puke
- New Zealand

other places of business,
conducted from converted

Yours sincerely

Theima E. Lindstrom.

m