Finland’s paper packaging industry takes hit as unions continue strike action over wages and bargaining powers

25 Mar 2024 --- Finland’s paper industry is suffering as thousands of workers continue to strike over government plans to introduce labor reforms that would limit union powers, lower social welfare and make it easier to terminate employment contracts.

Among packaging businesses impacted by the strikes is Metsä Group, which has announced it will close 13 of its mills until the strike ends. Speaking to Packaging Insights, a company spokesperson says: “Strikes affecting the operations of ports and railway yards have significant impacts on the operations of our mills in Finland.” 

“The financial impact of the strikes on Metsä Group is significant. The effects of delivery disruptions are longer-lasting than the announced three weeks of strikes, and it will take months for the situation to normalize.” 

“We will halt production at our factories when product warehouses are filled or when an insufficient amount of raw materials is available. According to current information, mills will be restarted when raw material flows and product transportations normalize.”

Finland’s strikes 
Earlier this month, the Central Organisation of Finnish Trade Unions (SAK) announced that over 7,000 workers would begin two weeks of strike action until the government, elected last year, agreed to negotiate over its industrial policies.

“We have been willing to negotiate on major issues of principle that are important to us and in line with the government’s objectives. Even such significant compromises have not evoked a response from them,” says SAK President Jarkko Eloranta.

So far the strikes have caused an estimated minimum of €1 billion (US$1.08 billion).“We are doing this to defend the rights and interests of all employees, and we are also seeking to ensure fair and equitable treatment for future generations of employees in Finland. This treatment should enable employees to influence their own terms and conditions of employment through collective bargaining and agreement.” 

Since taking office last June, the current administration (considered right-wing) has reportedly seen more political action by national industries than all governments since 1991 combined. Finland’s paper industry is valued at roughly €12 billion (US$13 billion).

Industry compliance 
Also impacted by the strikes are packaging giants Stora Enso and UPM Raflatac. Recently, Finland’s Paper Workers’ Union announced it would be terminating collective agreements with UPM and its subsidiaries. In a statement, UPM announced that negotiations with the union have been ongoing for two years and are “not related” to the current strikes.

“The strikes are very unfortunate, and UPM suffers from their collateral effects,” the statement reads. 

The company says that the business environment has changed significantly since current contracts were signed, and that wage increases must be defined by mutually agreed productivity improvements. 

“The Paper Workers’ Union’s decision to terminate the collective agreements in the middle of the contract period is regrettable. We had hoped that wage increases and productivity improvements could have been discussed constructively without terminating the agreements. Our aim is to find mutually beneficial solutions without creating unnecessary insecurity,” says Jyrki Hollmén, vice president for Labour Markets at UPM.

“UPM wants to reward good performance. Competitiveness is key to the future of UPM’s businesses, and its continued strengthening is in everyone’s interest.” 

Stora Enso also announced last week it would be shutting two of its mills until it receives more clarity on how long the strikes will last. Both companies are refusing to pay their workers until exports resume. 

By Louis Gore-Langton