The provincial government announced on Monday that it had accepted a deal that would see the company broken up and sold to smaller local companies and with the lucrative marketing arm and FPI's only secondary processing facility sold off to a Nova Scotia fishing company.
Under the deal, the plant operators in Newfoundland and Labrador are required to keep employment levels - much of it heavily dependent of employment insurance benefits to keep people going for much of the year - at current levels for a minimum of five years.
Meanwhile, a majority of FPI's headquarters staff will likely get lay-off notices according to Henry Demone. The High Liner official told CBC Radio he expected a majority of the professional staff in St. John's will be looking for new jobs.
It won't be a good time for those professionals to be looking for work, at least in Newfoundland and Labrador. They'll be handing out resumes in a regionalready hit by a major slowdown in the oil and gas industry. The failure of a Hebron agreement last year cost the province about 3000 jobs and more than $10 billion in provincial government revenue. A squabble with oil companies over a 300 million barrel extension is also forecast to slow growth in the provincial economy and the impacts are being felt in the local job market.
In a news conference on Monday, though, Newfoundland and Labrador Premier Danny Williams heralded the new deal.
Williams told reporters that the agreement announced Monday actually worked out to be better for the province than its original demand.The provincial government has been engaged in an ongoing war with the former FPI board of directors. It took over 18 months to review a capitalization plan and only approved after the plan - to turn an asset into an income trust - had become functionally useless. The war has been marked by frequent - and apparently unfounded - accusations that the former board members were looking to break up FPI and acquire the assets for their own fishing companies.
"We in fact feel that we actually strengthened it," Williams said."I'm not just saying that, you know, to try and basically accommodate for the fact that we didn't get the quotas at the end of the day, but the federal government wasn't prepared to pass the quotas over [so] we got into a negotiation with them and [we] feel that we ended up better off, quite frankly."
In the end, the only people talking about breaking up the company were the provincial government and the head of the fishermen and fish plant workers' union.
Effectively, the deal ensures that FPI, which likely would have swallowed up smaller operators like Ocean Choice in the highly competitive local processing industry, has been smashed up.
Key assets, which reportedly also marketed fish for smaller local companies, have been sold off to interests outside the provinces.
The only thing guaranteed in the deal announced Monday seems to be the survival of fish processing plants in a sector of the economy already well-past glutted with capacity that cannot be met with supplies of local fish. Increasingly fish plants in Newfoundland and Labrador have come to be regarded as stamp plants, in which employees work for only enough weeks to qualify for federal income support programs.
Survival of the so-called stamp factories seems to have been one of the major objectives of fisheries minister Tom Rideout.
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