Tembec Inc. (B): Implementing Solutions to Stakeholder Tension

In the several years leading up to 2005, the economics of the forestry industry in eastern Canada deteriorated rapidly, undermining Tembec's profits. These factors included high wood costs, high energy costs, an appreciating Canadian dollar with respect to the U.S. dollar, the stiff duties imposed by the Softwood Lumber Dispute, intensifying global competition, and reduced allowable cuts in Quebec. Tembec, which had never closed a mill prior to 2005, was forced to close three mills that year. It was now facing other closures, including a mill in Saint-Raymond that was losing $1 million per month. The chief executive officer must decide how to implement the tough decision to close the mills. This is a supplement to Tembec Inc. (A): Creating Value by Managing Stakeholder Tension, product 9B05M051.