The year was 1972. A major international paper company decided to close its Canadian pulp mill in the single industry town of Temiscaming, Quebec. Within 90 days some some 500 employees (average age 48 with 25 years seniority) were laid off. The town was devastated, for the mill had been its lifeblood for 50-years of strike-free operation. Some employees accepted the fact, others vented their anger in demonstrations and shouting matches, but four men decided on a new course: to keep the company going as an employee-owned industry. 

Spearheading that drive was Frank Dottori, who, today, serves as president and CEO of both Tembec Inc. in Temiscaming and Spruce Falls Inc. at Kapuskasing, Ontario – a victim in 1991 of an international company’s decision to downsize another newsprint mill. Today, both business establishments are successful employee-owned companies with combined sales in 50 countries around the world totalling more than $1.2-billion.

Dottori was a 33-year-old technical expert at the Temiscaming mill when it closed. A native of Timmins, Ontario, after graduating in chemical engineering from the University of Toronto, he joined the Canadian International Paper Company (CIP) in 1963.

He left CIP in 1966 to work for Texas Gulf Sulphur but returned to the Temiscaming pulp mill in 1969 to serve in several technical and operating posts before the shutdown was announced.

At a 1994 symposium, Dottori outlined the steps taken to “organize the employees as partners and make a bid to take over the mill. We developed a vision: a company of people building their own future,” he said, and outlined the four key principles required: employee ownership, profit sharing, a participative/flexible management, and open communication.

In the early 1970s, however, employee takeovers were unheard-of. The owners wanted to demolish the plant on the shores of the Ottawa River, not sell it. Battles and demonstrations stretched into 1973 before, with the support of the Quebec government, an agreement was reached to sell the company to the employees for $2.5 million. The labour act was changed to allow union members to serve on the board of directors of the new company.

Dottori became production manager of the newly named Tembec Inc., was named mill manager the next year, and was appointed executive vice-president in charge of operations in 1977. He became president and CEO two years later, a position he still holds today but over a much larger enterprise that includes the mill at Kapuskasing, Ontario.

With Tembec established as the industry model of a successful employee-owned company, Dottori became involved in negotiations taking place in 1991 between the 1,200 employees at Kapuskasing and joint owners Kimberly-Clark Corporation and the New York Times Co. to acquire the mill slated for major downsizing. The Ontario government acted as facilitator during these negotiations, and Dottori provided the leadership that would define the philosophy and structure of the new venture. The result was that Tembec would own 41 percent of the company, employees 52 percent, with other investors in the community and region holding the rest. The same vision and principles used to create Tembec were established at Spruce Falls.
 

Frank Dottori receives the Order of Canada, Canada’s highest civilian award, from Governor General Jeanne Sauvé, 1989.

The results at Spruce Falls Inc. proved spectacular. By December 1992, production was up 40 percent and a profit of $4.5 million was declared. In 1993 that jumped to $15.7 million and year-end results for 1995 were net earnings of $50.9 million. At the same time, a $360- million-dollar modernization program was well under way. This included a thermomechanical pulp plant which required 50 percent less trees than conventional chemical pulp processes.

“Employee ownership,” Dottori asserts, “doesn’t make us socialists, but rather small “c” capitalists. Every employee must be a shareholder and ownership must be significant enough to give employees a real sense of ownership and responsibility.” Profit sharing at Spruce Falls is based on six percent of adjusted gross profits.

“Management style must also be different in such an employee enterprise,” says Dottori. “Management doesn’t have rights in our companies. We have responsibilities.” Senior management and union executives meet frequently to discuss everything from plant operations to marketing. Other meetings between division managers and employee representatives are conducted to keep employees informed and get feedback. At the same time the two companies provide up to 80 hours a year per employee on training or retraining programs.

Now approaching two decades as president of the two employee-owned companies and numerous subsidiaries with plants in eastern Canada and France and trade with more than 50 nations worldwide, Dottori admits to being a workaholic, enjoying being on the job an average of 70 to 80 hours a week.Married in 1964, with a family of three children, Frank Dottori received the Order of Canada in 1989 and was named “Businessman of the Year” for Northern Ontario in 1992, admitting on that occasion, “I admire anyone who sets his mind to accomplishing and achieving a goal that is good for themselves and good for society.”

Mel James