Union officials said Wednesday they hope to continue negotiating with KapStone Paper and Packaging Corp. after their members overwhelming approved a strike authorization against the company.
Gregory Pallesen, vice president of the Association of Western Pulp & Paper Workers, said the two parties still have mandatory topics to negotiate.
“If the company doesn’t agree to continue bargaining, then it certainly looks like the Longview location will end up headed down the path toward a serious labor dispute,” added Pallesen, who is based in Portland.
Pallesen said that union members will discuss the strike authorization vote and contract talks at their regular weekly meeting at 5 p.m. Thursday.
About 99 percent of the voting members approved the strike authorization, union officials said Wednesday. The vote does not immediately trigger a strike, but it allows the AWPPW bargaining team to call for one after giving KapStone 10 days’ notice. A strike authorization is a way to pressure the company in contract talks. KapStone officials had not returned several phone calls for comment Wednesday.
The union’s labor contract with KapStone expired in May, and talks on a new pact are hung up on health care, overtime and other issues, according to the union.
Pallesen said the company sent email to its Longview employees Wednesday morning attempting to “clarify” what it considered to be misconceptions about the proposed changes to health care savings accounts.
It was not immediately clear when another bargaining session may be held. KapStone officials Saturday called its latest contract proposal its “last, best and final offer.”
AWPPW Local 153 has represents nearly 800 workers at the Longview mill. Voting on the strike authorization occurred Monday and Tuesday.
Local 153 last had a strike at the Longview mill in 1978. Since then the membership has authorized strikes several times, but strikes were avoided. However, Local 153 has never negotiated a contract with KapStone, which bought out the former Longview Fibre Co. operation last year.
While many paper and pulp companies have seen net incomes shrink as demand for newsprint and books decline, KapStone’s focus on high performance containerboard have helped it stay profitable, analysts say.
KapStone recently finished a record third quarter, with net income reaching $54 million or 11 percent higher than this time last year, according to the company. However the company isn’t immune to changing demands in the industry.
Kevin Mason, paper industry analyst at ERA Forest Products Research, said declining demand for other paper products is casing other mills to move into the containerboard market, increasing competition for companies such as KapStone.
Mason said that demand for containerboard is projected to rise 0.5 percent in the next few years, while supply is expected to increase 2.5 percent. Although containerboard prices are holding, companies like KapStone could be looking to control costs now in anticipation for possible oversupply of its product, he added.
“The good times in this industry never tend to last,” Mason said. “Even in the good times you want to keep your eye on the ball (to manage) costs.”