HELSINKI, Aug 27 (Reuters) - Finnish forestry products maker UPM’s Chief Executive Jussi Pesonen on Thursday blamed constantly rising taxes and excessive pay rises for the group’s planned job cuts.
UPM announced a cost savings plan worth 75 million euros ($88.7 million) on Wednesday which includes the permanent closure of Finland’s last remaining newsprint paper mill and the sale of another paper mill in Wales.
The proposals will affect up to 840 of its roughly 19,000 employees.
“The share of external expenses and the tax burden has become insuperable in Finland,” Pesonen wrote on the company’s website.
UPM said when reporting its second-quarter earnings in July that the COVID-19 lockdown of businesses, offices and schools had caused a drastic decline in printed advertising and use of office papers.
Pesonen said while the market situation was one factor in the decision, external expenses such as the paper industry’s electricity taxation, which he said was four times higher in Finland than in neighbouring Sweden, were also to blame.
Finland’s forestry industry, which accounts for around 20% of the country’s exports, has repeatedly blamed taxation and wages for its problems competing in global markets.
“Diesel tax gets raised during every government term despite it being well known that 80% of its consumption comes from heavy traffic, for example wood and goods transport,” Pesonen said.
Finland’s current centre-left government issued a tax hike on fossil fuels from the beginning of August in order to cut emissions, though professional heavy traffic continues to benefit from a lower diesel tax base in comparison with petrol.
Pesonen also criticized local employee unions for seeking general payrises and shorter annual working hours, “despite an income level which is already 30% higher and annual working hours already shorter” than in similar roles in Germany. ($1 = 0.8452 euros) (Reporting by Anne Kauranen; Editing by Jan Harvey)
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