Trouble at the Kinleith mill

Half of Kinleith's workers are about to lose their jobs. This two-part series chronicles the devastating impact of "restructuring" through the eyes of one Tokoroa mill family. TIM WATKIN reports.

Dean Lethbridge looks up from cutting meat and smiles broadly at the young blonde woman entering his shop. "Gidday Sharn," the butcher booms, his eyes creasing with concern.

"How're you feeling?"

Sharn Jones, 31 and usually bubbly as a hot spring, sighs.

"Pretty nervous. Actually I'm feeling a bit sick today."

"Yeah, Tokoroa's been pretty shaky this week. It's crunch time."

Lethbridge knows how to read the mood of this tightknit town. He's worked in this shop on Rosebery St since 1959; owned it since 1974. And he knows Sharn, having hunted pigs with her grandfather and worked with her father behind this counter. He remembers her mother walking past the front door with her in a stroller.

Sharn shakes her head gingerly.

"Man," she says, "I've been in denial for the past few months. But the last few days I've had this tension headache."

Lethbridge smiles sympathetically, leaning on the display cabinet complete with hunks of brisket and bacon - "for our darker brethren".

"And the red wine hasn't taken it away?"

"No," Sharn laughs. "Nothing works. Hey, Deano, could you pick me out some nice steaks?"

Sharn wants to put a decent meal on the table tonight. It's October 2 and later this afternoon her husband Craig, 37, will find out whether he's been made redundant from his job as an industrial electrician at the Kinleith pulp and paper mill.

For six months the Joneses, like hundreds of other Tokoroa families, have known their livelihood and way of life were on the line. Carter Holt Harvey, which owns Kinleith, announced on March 27 that nearly half the mill's staff would be laid off. Of the 770 existing staff, 355 would be made redundant. Of those 355, 173 would be re-hired by contractors to handle plant maintenance. There would be 415 CHH employees left, and 588 workers on the site, down from a high of around 4000 in 1969 when it included sawmill, forestry and harvesting operations.

Months of waiting and fighting followed. Redundancies were announced, only to be retracted when the Engineers Union (EPMU) won a claim of bad faith in the courts, forcing the company to consult again. On this sunny spring day, that second effort at consultation over, CHH will say whether they will work with the union's money-saving proposals or go ahead with the layoffs.

Sharn drops her bag of meat in the back of the car, then pops down the road to clothing store, Struts. She flicks through the new season stock with girlish glee.

Sharn's always had a taste for the bright and funky, and it's a rare chance to browse without the kids in tow. Keegan, 9, Harlen, 5, and Flynn, 4, are spending the day at Mt Maunganui with her mother and stepfather. But she's distracted. She won't be buying. Not today.

"The company's announcing what they're doing this arvo," she tells owner Brendon Bradley, wearing glasses and a Ben Sherman shirt. "It's 200 jobs we can ill afford to lose," he replies, "but ... "

He shrugs. He's been selling clothes in Tokoroa for 27 years, seen the lay-offs of the past - in 1986, 92 and 98 - watched the population dwindle, and the number of menswear shops in town drop from eight to three. Even then, to make a buck he's diversified into womenswear and clothes, targeting the youth market.

"It's like so many small towns," he says.

Heading back to the car, Sharn stops to chat with a woman who worked for her when she ran a florist shop. Just up the street, its name - Sharn's - is still writ large across the front window. When Harlan was born she gave it up to be a fulltime mother. The shop's empty now.

She heads round to see Craig's parents, Dennis and Audrey, five minutes' drive away, and is there when Craig calls.

Audrey answers the phone. "Heard anything yet?" she asks.

TOKOROA clings to the side of Highway One, where the north Waikato bluegrass gives way to south Waikato's thick pine forests. Here in timber town, the trees stand tall and unchanged by the seasons.

Kinleith was supposed to be an evergreen. Opened in 1953, it was built to last.

Since redundancy came to town in 1986, however, when New Zealand Forest Products closed Kinleith's sawmill, the mill has lived in a perpetual autumn, shedding workers like leaves.

On March 27, news of the redundancies fell like an axe. Two weeks later, as autumn blows up from the south, Craig and Sharn Jones are sitting in their living room trying to make sense of the lay-offs. Their three boys sit at the coffee table munching potato chips.

A heap of questions - why was the company doing this, who'd be re-hired, who'd be cut, would anyone even want to work for the new contractor, would the union fight back - swirl around.

"It just stunned us all. Everybody was just blown away," says Craig. "We knew there were changes in the wind and what they had to say was big. But, man, it's the best-kept secret that there's ever been on site. Turned out it was the end of the line for all of us."

"We were so rapt when you got [work] back out at the mill," Sharn says sadly to Craig. "We were like, god ... We were so rapt two years ago."

"It allowed us to buy this place," Craig nods, looking round his snug living room. Floral curtains cover the ranchslider that leads out to a balcony and barbecue. Big blue sofas hug one wall, while on shelves opposite sit a stereo, continually playing a local radio station, a row of five lava lamps, wrought-iron candlesticks and professional photos of Sharn, hair up and glamorous in an off-the-shoulder gown. Sharn loves the place; she thinks it looks like a treehouse.

It had been a tough few years before they bought here. Craig had been contracting, which meant out-of-town work. Up at dawn and home after dark, long miles in the car and little time with Sharn and the boys, including newly born Harlan and then Flynn. No way to raise a family.

The job at Kinleith gave them the financial security to buy their house and commit to their home town.

Both Craig and Sharn were born in Tokoroa. They got together in the local nightclub, Cinderella's, when he was 23 and she was just 17. She'd started work as a florist when she was 15, leaving school two weeks into the 6th form when she saw an advertisement in the paper.

She was good at her job and knew Craig from when he came in to order flowers for previous girlfriends. He had done his four-year apprenticeship at Kinleith and had been working there two years.

Everyone knew he'd recently broken up with a local girl who had been Miss New Zealand. A friend dared Sharn to try and score Miss New Zealand's ex. She took the dare for a laugh and ended up marrying him.

Within a year they were in Britain together, doing their OE. Three months in London and eight in Bath. One day Craig went down on his knees and proposed to Sharn on platform seven at Victoria Station. She said yes, and everyone on the tube cheered them.

But they soon tired of Britain.

"We remember sitting in Bath, in the square," Craig says, "looking around and thinking, we don't know a single person. Whereas we got back to Tok and we knew everybody."

They thought about striking out in Hamilton or maybe Auckland when they returned. But their parents were still in Tokoroa and they liked the lifestyle. It was the place they knew and where they were known. Their grandfathers and fathers had worked at the mill, made a good life here.

It was a place their "young fullas", as Craig calls them, could grow up safe, outdoors, and, thanks to the ethnic mix and tight community, never knowing the meaning of prejudice. With babysitters on hand, it's also been good for their relationship, he adds.

They got married in 1991, on stage at the Tokoroa little theatre, dry ice at their feet and Stairway to
Heaven playing as Sharn came down the aisle.

Craig's father, Dennis Jones, took redundancy from the mill the same year and opened an upmarket gift shop in town. Sharn moved her florist shop on to the same premises and Craig started contracting - Kawerau, Paeroa, Auckland. Then in 2000, when Harlan was still a pre-schooler, they started hiring again at Kinleith and Craig got his job in the central electrical workshop as an industrial sparkie.

Now, Harlan's 5 and pushing his brother. "Flynnnnnn," he cries, turning to his dad, "He's stealing my chips."

"Harlan, you can share each other's," Craig says, before returning to the talk about the mill. "Some people in town say, 'Serves you right, you've been paid too much for years'," he says.

The money is good. Craig's worked his way up to be a leading hand, which means he heads a team of seven and, with his trade qualification, earns $70,000 a year. It's a high wage typical of Kinleith, which means workers there struggle to win sympathy when they complain of being hard done-by.

"But you work long hours to get paid the good money," Craig argues. And they're highly trained. The base rates at Kinleith range from $13 to $17 an hour, with sparkies on $17. With allowances, that goes to $20 an hour.

The good money comes from overtime - time-and-a-half after eight hours and on weekends, rising to double time after three hours. As high as the pay sounds, the EPMU says that's market rates. Where senior fitters at Kinleith can expect $22.63 an hour (including allowances, but without overtime), their equivalents at Kawerau and Glenbrook mills earn $26 an hour.

Diary, April 24: "Went to town today. Gloom, gloom, gloom ... Had to get Keeg's his mouthguard for hockey. Flynny Boy screamed up large, entire shops stared at us. He wanted a mouthguard also. Normally I would have said OK, but even $5.95 might be needed at the end of the day ... "

IT'S about his mates, Craig says. Even if he can't work at Kinleith, Craig knows industrial sparkies are in high demand - "I'll get picked up somewhere, mate".

It's the older guys he worries about. The ones who went straight to the mill from school decades ago, who have never been for a job interview, never got any qualifications. The ones who have given the best part of their lives to Kinleith. The average length of service at the mill is 22 years.

"I had one guy, I was talking to him the next day and he goes, 'Did you know there's not much on TV at two in the morning'.

"Yeah, I guess not.

"He said, 'I got up and there was my wife crying at 2am, wondering what we were going to do'. There are a lot of people who just know they're in the gun.

"Even if at the end of this I have a job," he continues, "there's not going to be anything to be really happy about, because I'll know a whole lot of people who haven't."

Tokoroa's that kind of place - everyone looks out for everyone else. There's an enduring community spirit, even as the town has mirrored the mill, shrinking from nearly 20,000 in its 1985 heyday to 14,745 in last year's census.

Tokoroa - named, it's believed, after a Ngati Kahupungapunga chief killed during a siege of the nearby hilltop of Pohaturoa - was built on and out of timber. Vast swathes of pine forests were planted on three sides of the town through the 20s and 30s, when the population totalled only a few hundred.

"Then," the New Zealand Herald reported in 1954, "when the trees reached maturity after the Second World War - boom!" There was an "astonishing transformation from insignificant wayside village to turbulent timber town."

The same story began: "There is no place quite like Tokoroa. With a population that seems to treble every three years, it reflects the vitality of a romantic new industry - the production of timber, pulp and paper from man-made forests.

"Five years ago 230 people lived at Tokoroa. Today there are 4000. Nearly all of them are young. Only two are old enough to retire; there are no pensioners, no chronic invalids, and there is no cemetery."

The newspaper lauded the depression-era forestry men for having laid "the foundation of a great and flourishing industry".

The building of saw, pulp and paper mills in the early 50s drew workers from all over the country, many of them rural Maori encouraged to move to towns by government work and housing policies.

About the same time, the government opened the door to Pacific Islanders as local industry's thirst for labour proved unquenchable. Thousands came to Tokoroa.

Then, in the 90s, thousands started leaving again. Most didn't want to go, but the global timber, pulp and paper market had turned for the worse. The world has changed, they were told; its thirst for wood products was being sated by other forests and other mills. The skilled hands and strong arms that had been recruited to build an industry were discarded.

And so the number of Kinleith workers whittled down to a twig.

Today, the town's unemployment rate is 13.3 per cent, nearly twice the national average. But with high wages at the mill it's in the odd position of having above the national average of people earning both over $50,000 and under $20,000. Its cultural diversity is comparable probably only to South Auckland.

Like so many other small towns, it's fighting against the lure of the cities to keep its people and businesses. And like so many other small towns, it's got people standing against the wind, wanting to stay.

Months later, on an October day as she was waiting to hear whether her husband was being laid off, Sharn tried to find the words to express her sense of belonging to Tokoroa: "Here, I am someone," she said simply.

Diary, June 17: "I have decided to take a whole new attitude about this entire awful situation. I don't care any more. I am no longer going to stress over this ... we will get through this ... "

A TRAIN rumbles down the tracks in front of the Kinleith gates heading to the Port of Tauranga. On board is either some of the 250,000 tonnes of pulp the mill produces each year or some of the 300,000 tonnes of linerboard.

Pulp sent to Asia is turned into writing paper. Linerboard - 60 per cent heads to Asia, with 40 per cent sold in New Zealand - is for cardboard boxes.

In this country, they will be used to carry meat and kiwifruit. In the Philippines, Dole will use them to box bananas. In South Korea, LG will put televisions in them.

Serving the demands of the market is what the mill was built to do, in days when a protected market was a generous and popular ruler.

That market delivered prosperity to Tokoroa and its people, so when the market wanted more, people worked harder. But somewhere down the years, beyond the control of mere workers and mill managers, the munificent market turned mean. It became global, unprotected, and started demanding more for less.

In the past 20 years, five of the six paper machines and one of the two pulp machines have been shut down. In the past decade nearly 650 workers have been laid off. In 1953 the mill was producing 11 tonnes of pulp a day, now it produces 2000 tonnes. Still the market wants more. Those working to meet its demands have no choice but to comply.

"Now we have to compete with the best in the world. If we don't do this, instead of having 750 jobs today, in a few years we'll have no jobs," says Kinleith chief executive Brice Landman, a thick-haired 57-year-old man with glasses and a lumberjack's build, who has been in the job three years. "We have no alternative."

There's a phrase CHH management keep using when talking about the redundancies and outsourcing, "This is not a fire drill". In other words, if they don't cut costs the mill will die, further eroding our manufacturing base.

"If we're not careful, this country's going to depend on cows and tourists," Landman warns.

Andrew Mortimer, a financial analyst for First New Zealand Capital, says mill closures in the US and Canada, have become "a weekly occurrence". They're just not offering the return on investment companies want - no more than if they merely put their money safely in the bank.

Those mills, and ours, can't compete with the new mills in countries such as Brazil and Indonesia. Their labour is marginally cheaper. Their trees grow faster - Brazilian eucalyptus mature in five years, our radiata takes 23.

These mills offer much the same quality pulp and linerboard as Kinleith, so customers buy on price. Supply currently outstrips demand, forcing the price down.

The only ace Kinleith's had up its sleeve is the low New Zealand dollar. That's kept it in the game during these lean years.

"There's very few mills make money," Landman sighs. "It's a stupid business."

The good news is that the cycle is expected to turn. Some day soon, they think. There's the "wall of wood" on the cusp of maturity. And the growing Asian market - China alone is consuming 8 per cent more pulp every year, Landman says.

"This could be a growing industry," he adds.

Won't that mean you'll need more workers?

Later, but not yet, he shrugs. The mill lost money in three of the past six years. For CHH and its owners International Paper (IP) to make the most of its opportunities, Kinleith has to improve its return on investment.

"Our owners want to see if it can make money, see if they can have confidence in it. In Carter Holt Harvey you've got to earn the right to grow."

Mortimer says CHH is right to be cautious as its competitors cut costs.

And so Kinleith is "re-organising", as Landman puts it. "We are grossly inefficient." He means wages. Kinleith has too many employees and too much overtime, he says firmly.

In the 1950s the mill's high wages were celebrated as progressive, and reward for working families. Now, Landman calls them "a cost problem".

Wood is the mill's greatest cost, followed by labour, then electricity. Together, they account for 70 per cent of the mill's bills. "We can't control the electricity price. We can't control the wood price. The only thing left was the labour price."

Enter ABB, a Swiss-based multinational with interests in industries ranging from finance through electronics to utilities. It is responsible for maintenance at 25 pulp and paper mills worldwide, and wants to add Kinleith to that list. Its deal: to run maintenance with 173 staff, down from 263, and save a total of $20 million a year.

These were numbers Landman wanted to hear. What's more, it would take the workforce - unions and all - off his hands so he could focus on production. The market was also pleased to hear its demands were being addressed - CHH shares rose 3c to a two-year high.

"The revamping of the Kinleith operation was viewed very positively by the market," Macquarie Equities broker David Cleal told a trade publication. "It coincides with the view that the cycle is turning up anyway."

Landman sighs. Honestly, he says, the workers are living in the past. The average income of Kinleith wage-workers is $80,000, plus superannuation and health insurance, thanks to the overtime deals won over the years. That's for an average 48-hour week. It's no longer realistic. One guy, "who must've lived at the mill", made $120,000 last year, he says, shaking his head in disbelief.

However, while Landman is prepared to criticise other people's incomes, he won't talk about his own. "I don't have to disclose that. Only Chris Liddell has to do that," he snips.

According to CHH's 2001 annual report, Liddell earns between $1.29 million and $1.3 million. That was a 23 per cent rise on the previous year and when the details were released just a week after the lay-offs, union leaders said it "antagonised" the situation. However, management salaries had already been frozen because of the company's poor performance. Liddell, 44, has since been made vice-president, finance, at the US head office of IP.

Up the corporate ladder, the repercussions are fewer. Connecticut-based IP operates in 50 countries, has annual sales of $30 billion and, though few know it, is one of the world's largest private landowners. In the past five years, however, it has struggled.

This year's statement to shareholders includes a performance comparison between it and a peer group of six key competitors.

If you invested $100 with the peer group in 1996, you'd now have $123. If you'd invested with IP you'd have just $112. Further, since 1999 it has made fully 12,000 employees redundant.

Despite this poor performance, the statement announced a 4 per cent pay increase last year for CEO and chairman, 63 year-old John Dillon, to US$1.1m ($2.3m). That's not including his US$600,000 bonus, stock options and $255,742 in "other compensations". All up, that's around 50 average Kinleith jobs.

It's the kind of thing that puts a glare in the workers' eyes. Things like that and the fact those who make the big decisions - from Dillon down to Landman - don't live in their town. Landman lives in Taupo. He says he loves the mountain and lake and, after a lifetime of living in mill towns - his father was an accountant at Kawerau - he and his wife want a different lifestyle. Still, Landman insists he's not blind to the damage his decisions are doing. "The workforce won't believe it, but I lose sleep over this."

He wrestles with the impact on their families and community, down stream. But it's the only way to make Kinleith viable, he insists. He has no choice.

So who do those families blame for all this? He folds his arms, as he does every time the workers and their families are mentioned.

"I don't think you can blame anyone. You have to look at the market."

Diary, May 28: We might have to look at leaving our home town ... It really sluts me how these high-powered pricks can come in and stuff up thousands of peoples' lives; after all, all we are trying to do is live in this friggin' hole!! Yes, I'm pissed off.

CRAIG and Sharn clamber into the taxi on a nippy July night, on their way to the Tokoroa Workingman's Club and the start of a night on the town.

Sharn's wearing a lace-edged black top with glitter on her skin and jeans. She's wrapped in what she calls her Cruella DeVil coat, with its fur trim. Craig's in grey pants and a black T-shirt, with a straight-cut dark grey jacket.

They want to put the last week behind them; have a few beers and few more laughs. Over the past two days, Craig and his workmates have received letters confirming their redundancies.

"I realise this letter carries harsh tidings," mill manager Dave King wrote. "I wish it were otherwise. Unfortunately, it is a reality of today's globally competitive world that such things must happen."

It would be seven weeks before a court would order the company to retract those redundancy plans and start consultations again, so that night the Joneses were swimming in a pool of mixed feelings - anger, fear and relief that a decision - any decision - had been made.

Taxi-driver Wayne Hill used to play rugby with Craig and is the grandfather of one of Harlan's mates.

"Hiya Craigy."

"Wayne-o, how are ya?"

"So, Mr Fishbones has been made redundant," says Sharn. "We got the letter this week."

Craig points out he's not redundant quite yet.

"OK, the first of October then," she concedes.

"The guys won't take redundancy and they [the company] will be stuffed," says Craig, belligerently, adding they won't work for the contractors.

"Oh they'll fill the jobs all right. If you don't take them, they'll hire folk from Auckland," says Sharn, fed up. Her positive attitude has turned wintry bleak.

A week earlier she'd written in her diary: "I have had a gutsful ... Perhaps I need to get a grip, but it's a grind and with everything running through my brain at the mo, it's just not good. I just wish we knew what the heck is to become of all this ... "

Tonight's first stop is the Tok Club. Past the old fella on the door in the monogrammed v-neck jersey and the photographs of former club presidents hanging on the wood-panelled walls. Aside from the bar, there's a dance floor, a restaurant area sectioned off, and on a sunken wooden floor eight full-size pool tables where a few blokes play under the watchful eye of a giant marlin.

Women were only allowed as members two years ago. On tap, there's Waikato, Tui and Rheineck. The drink cabinet's full of mixers - no bottled beer in sight.

Dozens of people, young and old, are leaning against tables or sitting on stools. There's no generation gap here. Nor is there the usual crowd. Some are staying home, saving their money.

Craig joins a bunch of men standing round a table, shoulders hunched. Talk is of the mill.

"That's the nature of Kinleith. They've got all this experience and they're tossing it away," mumbles one old guy.

"ABB, they're not going to save them money," another guy says critically. He's thinking about moving overseas.

Electrical planner Bob Dargaville offers his analysis, hands orchestrating his words. He's happy to improve production. That's practical and can be worked on. But the company doesn't want that. It wants to save money. That's financial.

"Can't do much about that," he shrugs.

They talk about extra work, quality, their safety record. They're insulted and disbelieving.

A few tables down, the younger crowd say the mill was the last generation's thing. They've gone to university, got qualified.

"This generation is saying we don't revolve around the mill," says Lee Fitzpatrick, 21.

"It's going to be a bummer,"says Matt Risbridge, 29 and recently back from overseas, "but it's not going to affect the CBD. Nothing's going to change."

Rebecca Miller, 21, scoffs. "He's talking crap. Of course it's going to have an effect. Everyone said, 'Let's get out of Tok'. They couldn't wait to get out. But they've come back. In Tok you know everyone."

That's nowhere more obvious than here. Craig and Sharn have hugs and kisses from everyone. Around midnight, with Adrian, 28, and Michele Le Gros, 27, they head round to the Chill Bar on the main drag and a younger crowd. Threadbare carpet is held together with tape, a DJ is hidden behind corrugated iron in the corner. The music's more Pink than Rolling Stones.

"See that guy on the other side of the bar?" Craig asks, grinning the grin of a few beers. "I used to babysit him. It's funny, you go from seeing these guys as kids to going out on the piss with them."

By 1am there's about 30 people in the bar; one couple snogging in the corner. There's only four women on the dance floor, but when the DJ plays Footloose, it fills up.

"Been working so hard/I'm punching my card/Eight hours for what?/Oh tell me what have I got/I got this feeling/That time's just holding me down/I'll hit the ceiling or else I'll tear up this town ... "

Adrian buys a round. He's been 10 years at the mill, as a boilermaker, fitter and turner, leading hand, and now a maintenance planner.

"It's all bollocks," he says. "We've been loyal to the company and the town. We've worked hard. If the shoe was on the other foot, would they want to be treated this way?"

They're fighting for the community as well as the mill, he says. But Michele gets cross when he talks about fighting. And strikes. They have a 21- month-old daughter, Paris, and he's got to put his family first. They need security.

She's trying so hard to be sensible. But as she talks, sentiment bores through. She moved here from Hamilton as a teenager.

"This place has got town feeling. It's so tacky, I know, but it's really cool."

As much as she longs to, she can't see how they can stay in Tok. And what about Paris?

"She's not going to see Tok. This is the place she was born, but our hand is being forced. You know the saddest thing? We have all been best friends and it's the demise of our group from high school. That's it. Gone."

It must be nearly 3am when they stumble out the door into the winter wind, and across the highway to the old pie-cart Billy T. James called the best in New Zealand. Burgers are ordered and gulped down, as the couples cuddle and laugh against the cold.

This is what Craig calls "comfortable". These are the friends, traditions and life they like. They've been doing this since they were kids and don't want the chain broken.

"That's the thing," says Sharn on the way home, "no-one knows what we're getting into from here."

Diary, July 2: "Craig is stressed and snapping like a turtle. The mood out at the patch [Kinleith] is totally bad, so I hear ... "

AUDREY asks: "Heard anything yet?"

"Yeah," says Craig. The union delegates have just left their talks in Taupo and called their members. Word spreads quickly around the site.

The workers had been feeling positive all day, confident the company had heard their complaints. Craig was at his computer in his workshop talking over jobs with some of the boys when one of the fitters, Bruce Martin, came in with the news.

"They're going ahead with the original plan," Craig says down the phone, his voice flat and quiet as death. "People are just gutted. You just look at everybody, they are absolutely gutted." He feels sick. He wants to cry. The boys stand around in silence, until someone growls, "The mongrel bastards".

Sitting in her parents-in-law's living room, Sharn's head is spinning. What will they do? Leave town? Work for ABB? Will Craig have to contract and travel again?

She stares out the ranchslider into space, looking through the trees in the garden where spring's new shoots are budding.

Part two

Criag Jones lies stretched out on the carpet of his Tokoroa house, reading a ring-bound information booklet, not for the first time. Handed out by his bosses two months earlier, it's 54 pages long and titled Kinleith: New Organisation, Next Steps. It's all about his future.

His work overalls dispensed with, Craig's wearing track pants and a black T-shirt. The Kent fire's burning in the corner to ward off the July chill. Over his shoulder a full moon is rising above the hills. His wife Sharn is cooking dinner in the kitchen, while 9-year-old Keegan and 6-year-old Harlan are playing in one of the bedrooms and 3-year-old Flynn is running circles round the living room, diving on to the couch, his grin as wide as the Waikato.

But Craig's face is grim. An industrial electrician at Kinleith for the past two years, and now a leading hand in charge of seven men, he's facing the prospect of redundancy in October. On March 27 the mill's owners, Carter Holt Harvey (CHH), announced plans to lay off 355 workers, outsourcing the maintenance work to international contractors ABB. Where Kinleith has a maintenance workforce of 283, including Craig, ABB intends to do the job with just 173.

The restructuring will save $30 million a year - enough, Kinleith managers believe, to keep the mill viable. It's lost money three of the past six years and CEO Brice Landman says: "If we don't change, the mill will close."

The booklet Craig's reading is all about that change, the kind of change Landman says the market demands, but also the kind that tosses families and small towns around like leaves on the wind. Distributed on May 27, following consultation with the mill's seven unions, it made workers furious. The mood at the mill is dark as a forest.

"Some people are 'bring on the war', others are 'what are we going to do?'," Craig says.

Used to being able to fix things with his hands, the words he reads as he flicks through the booklet have defeated him. "It's almost like you have to say, 'Sieg heil!' after each of their statements."

Each of the workers will be assessed so the company can select who will be made redundant, the booklet says. The workers have voted to boycott the assessments.

Craig's a laidback man who gets on with everyone. His refusal to get ruffled can drive the more emotional Sharn round the bend. Right now they're at loggerheads over whether to apply for the AB