AbitibiBowater new boss has a reputation for being an expert at controlling costs, a skill that will come in handy at the newly slimmed-down newsprint company, says chairman Dick Evans.
The Montreal-based company has made huge strides slashing its debt load, selling assets and containing costs in a just-completed restructuring, but it must continue to be vigilant on the cost front, Mr. Evans said in an interview Friday after announcing that president and chief executive officer David Paterson is stepping down.
Replacing him is Richard Garneau, an industry veteran who was head of West Coast forestry products firm Catalyst Paper Corp. from March, 2007, to May, 2010, and has been on the board of AbitibiBowater since June.
"We've made very dramatic changes, but we're well aware that these remain tough times for newsprint, and with the Canadian dollar near parity, so there is a significant cost issue regarding the Canadian mills that will continue to be there," Mr. Evans said.
"We're very aware we cannot stop here on the cost side and that we have to move faster down the cost curve than our competitors."
Mr. Garneau will also lead a management team - including Mr. Paterson in an advisory role until next summer - that will be on the lookout for acquisition opportunities, Mr. Evans added.
Mr. Paterson, who is from Atlanta, said in an interview he came to an "amicable" agreement with the board on his departure. "I was interested in staying on but it came down to making a long-term commitment to Montreal."
He rebuffed a newswire report that he was forced out. "Fired? No, I wasn't fired," he said. "There was no pressure, nothing negative. It was an open discussion with the board and it was decided that it would make sense for Richard, with his deep experience, to take over," said Mr. Paterson, who is 56.
In the end, it was a "personal choice" on his part - after 32 years in the forestry sector - to spend more time with his family, he said.
Mr. Garneau oversaw a sweeping review of operations at fine-paper maker Domtar Corp. about five years ago in his position of executive vice-president. As head of Catalyst, he spearheaded a tax revolt in British Columbia two years ago, arguing that the beleaguered forestry companies were being taxed too heavily by municipalities.
Mr. Paterson became chief of AbitibiBowater three years ago with the merger of Abitibi-Consolidated Inc. of Montreal and Bowater Inc. of Greenville, S.C. He presided over a huge overhaul of AbitibiBowater under bankruptcy protection after it struggled to cope with the declining North American newsprint market.
The 20-month restructuring was longer than expected but Mr. Paterson stayed on to the very end even though he had expressed a desire to leave earlier, Mr. Evans said.
Bertrand Marotte