Postmedia closing Vancouver printing plant, examining contracting out: union

VANCOUVER – The union representing workers at Postmedia (TSX:PNC.B) newspapers says the company has decided to close its Vancouver-area printing plant.

A notice posted Monday to the website of local 2000 of Unifor, formerly the Communications, Energy and Paperworkers Union, said the company wants to either contract out printing or open a new plant that can operate substantially cheaper.

The company plans to put its Kennedy Heights printing plant in Surrey, B.C., up for sale immediately and cease operations in 2015, the union said.

The statement said union representatives were informed about the decision Monday by Postmedia CEO Paul Godfrey, who presented two possible options.

One option would be to open a new plant, but only if the company and the union can reach an agreement that would cut costs by 70 to 75 per cent. Such an agreement would need to be in place by mid-November, the union said.

If that doesn’t happen, the union said the company plans to contract out printing to Transcontinental. The union said the company already has a contract in place with Transcontinental.

A spokesperson for Postmedia could not be immediately reached for comment.

The union’s statement noted its collective agreement stipulates “there will be no involuntary loss of employment of any regular employee during the life of the contract as a result of” contracting out.

“Union officers will be consulting with our legal counsel and meeting with members to discuss our next steps,” the union said in its statement.

Postmedia owns several newspapers including the National Post, Vancouver Sun and the Ottawa Citizen.

The media company announced in July it recorded a loss of $112.2 million in the most recent quarter. Its operating loss was $95.6 million, compared to an operating income of $4.1 million in the third quarter of 2012.

In July, Moody’s Investors Service downgraded Postmedia’s rating to negative, from stable, due to the media company’s declining cash flow as it transitions to a digital business.