The fate of the largest seafood company in Newfoundland hangs in the balance, and the outcome of its current situation may determine the economic future of at least seven small communities — their fishermen, plant workers and possibly the viability of some of the towns themselves.
Fishery Products International, Ltd. (FPI) based in St. John’s, Newfoundland, was offered for sale by its board of directors in January, setting off the latest in a round of contentious events that most recently culminated in a strike threat by 1,700 union workers.
The coast of Maine and the east coast of Canada share a common bond — while each have a few urban centers, the geography of both is largely rural, dotted with small communities, many of them heavily or entirely dependent on fisheries. Newfoundland and Labrador comprise a huge Canadian province — Newfoundland the ninth largest island in the world that is not a continent, and Labrador an even larger mainland area.
Sparsely populated and natural-resource dependent, the region relied mostly on “fish,” or codfish, for its economic support for 500 years. Since its fabled cod fishery collapsed in 1992, the province has struggled to keep small outport fishing communities alive, and not always successfully. Many have been abandoned.
Like Maine, particularly Downeast Maine, if a fishery or a fish plant closes in a Newfoundland outport, the disenfranchised workers can’t go down the street and apply for a good-paying job in some other industry. They must usually leave home to find work on the mainland, as more than 50,000 have reportedly done since the cod moratorium.
Members of the Fish, Food and Allied Workers Union rejected in mid-April what officials at FPI called the company’s final offer. The workers originally planned to hold off on a contract vote until a sale agreement for the company was completed, but as negotiations dragged on, the vote was taken.
Sixty-eight percent of the 935 workers who voted on April 12 turned down the contract that would have cut their pay by $1.06 per hour. The offer included a 10-cents-an-hour increase added by FPI at the last minute.
Workers now earning $13.66 (Canadian) would have been cut to $12.60 per hour, but union president Earle McCurdy said the sticking point was really all the other concessions demanded by the company of the 1,700 affected workers, such as cuts to vacation and overtime, saying “The combination was fatal to getting any kind of acceptance.”
The vote left union workers in a position to call a strike legally at facilities in seven communities as early as April 23 and they are expected to do so, just as shrimp and crab fishing seasons are set to open.
“Clearly to have a strike then would have a significant impact on people and the message was quite clear — they were prepared to live with that,” McCurdy said.
“The company had hoped its latest offer, which included an hourly wage rate higher than that recommended by the majority report of the Labour Relations Agency’s conciliation board, would be acceptable to the plant employees,” FPI said in a release.
McCurdy said he blames the entire situation on FPI board member John Risley, who is also chairman of Clearwater Seafoods of Nova Scotia. Risley spearheaded a hostile takeover of the FPI board of directors in 2001 that launched a continuing divisive relationship between the company, its workers and the provincial government. McCurdy also blames former federal minister, Newfoundlander John Crosbie, who assisted Risley’s effort.
Under the law creating the company, FPI may not sell any assets without approval from the provincial government. When the company was semi-privatized in 1993, the act further mandated that no shareholder may control more than 15 percent of FPI’s stock.
Since January, seven offers have been tendered by the company — including one for just the Danvers operation made by High Liner Foods based in Nova Scotia. High Liner has a plant in Portsmouth, NH and used to be called National Sea Products, under which name the company operated a fish plant in Rockland for many years.
Risley has said in order to be competitive with countries such as China, FPI must lower labor costs. Last year, Provincial Fisheries Minister Tom Rideout, charged FPI with illegally shipping some fish out of the province to China for processing.
At the time of the International Boston Seafood Show in March, FPI’s US employees and their customers expressed concern about the limbo-like state of the company.