Saturday, August 18, 2007
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Paper mill hires new outside contractor

Union officials wonder if the move is designed to send a message to their member workers.

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Prickly labor contract negotiations between MeadWestvaco and a United Steelworkers union at the company's Covington paper mill have sprouted at least two new thorns.

Much is at stake. MeadWestvaco is the largest employer and taxpayer for both the city of Covington and Alleghany County. The company's ups and downs also affect suppliers, including loggers who provide pulpwood, and the larger region's economy.

The first thorn is this: MeadWestvaco told union officials Tuesday that the company has hired Zachry Construction Corp., a national, privately owned, Texas-based construction and industrial maintenance firm, to perform paper mill maintenance work that is now contracted out to independent vendors.

MeadWestvaco and Zachry Construction signed a five-year contract.

That announcement came one week before stalled contract negotiations between MeadWestvaco and USW Local 8-675 are scheduled to resume Aug. 21 in Roanoke. Roy Hall, president of Local 8-675, said union officials have wondered whether Zachry's entry to the Covington mill's work force is designed, in part, to send a message to the union.

The second thorn is this: Local 8-675's contract with MeadWestvaco expired Dec. 31. Negotiations before and after the contract's expiration have yielded contracts union members have rejected. Sticking points have included health care coverage, pension contributions, a company plan to change maintenance craft boundaries and other issues.

In coming months, two other USW labor union contracts with MeadWestvaco are due to expire. They include USW local unions at Low Moor in Virginia and the MeadWestvaco Mahrt Mill near Phenix City, Ala. The Low Moor contract expires Sept. 1. The Mahrt Mill contract expires Oct. 31.

Hall said there is some chance the three locals can pool influence as a negotiating strategy.

Todd Allen, president of USW Local 1972 at the Mahrt Mill, expressed support for the Covington local.

"They are having a tough time up there and we are behind them 100 percent," he said.

But Allen said it is premature to speculate about his local's plans for contract bargaining.

"I ain't going to comment on that," he said. "I am not going to release any bargaining tactics right now."

Meanwhile, Hall said he learned Tuesday about the contract with Zachry.

MeadWestvaco said plant workers who are members of Local 8-675 need not worry when Zachry rides into town from San Antonio.

"They are going to take over some work that we have contracted out to multiple vendors," said Becky Johnson, a spokeswoman for the Covington mill.

Johnson said MeadWestvaco turned to Zachry as part of an ongoing effort to reduce costs and increase the efficiency of maintenance work at the older mill. She also said hiring the company will help "ensure a flexible contracting work force."

Vickie Waddy, a spokeswoman for Zachry, emphasized that the company is not a union breaker.

"We don't market ourselves as a replacement for union providers," she said.

Yet Waddy acknowledged that during Zachry's long history of performing contract industrial maintenance work "we have replaced incumbent union providers."

Johnson estimated that fewer than 10 independent vendors in the plant will be affected. Among other trades, MeadWestvaco contracts out some electrical and mechanical work. Contractors include national companies with workers from the region. Others are local companies.

Johnson and Waddy said current contractors and their employees can apply to Zachry to continue working at MeadWestvaco.

Waddy said she did not have specific information about the scope of Zachry's contract with MeadWestvaco.

Local 8-675 has more than 960 workers at the mill, and Johnson said MeadWestvaco employs a total of about 1,600 people who work in the city of Covington or in Alleghany County.

Rodney Bell, president of Local 464 of the International Brotherhood of Electrical Workers, said his local has about 51 people working on MeadWestvaco jobs.

"It would be in Zachry's best interests to keep the people who are already working in the mill, who have expertise and experience," he said.

On Aug. 1, MeadWestvaco Corp., with headquarters in Richmond, reported "strong second quarter profit growth" for the period ended June 30. Profit increased 20 percent to $149 million from the $124 million profit reported for the second quarter of 2006, according to the company. MeadWestvaco said it anticipates a similar increase in profit for the third quarter of 2007.

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