NEWS RELEASE PRESS RELEASE 
PACE INT'L. UNION, AFL-CIO/CLC

For Immediate Release:  February 3, 1999
Contact:  Keith Romig, PACE Communications Director
          615/831-6786

Union, Company Officials Announce New Beginning for Memphis Tissue Mill

     Memphis-Officials of PACE International Union and
Kruger Inc. of Montreal have jointly announced the
formation of a new company that will recognize the union
and operate a tissue mill here that workers have
struggled to organize since 1994. The two parties reached
a labor agreement, covering 400 employees, in recent
weeks to help the company finalize its purchase of
Shepherd Tissue Inc.
     The announcement is a major victory for the union,
demonstrating its commitment to organizing and ability to
connect new companies to valuable mill assets during a
paper industry crisis. PACE itself is the product of a
January merger between the United Paperworkers and the
Oil, Chemical & Atomic Workers International unions.
"This is the dawning of a new era for our union, and it
is fitting that we announce the formation of a new
progressive relationship between PACE and Kruger -- a
bold and innovative employer," said PACE International
President Boyd Young. "In my view, the most successful
companies today do not stop at focusing on profits; they
also focus on the profit makers -- the employees."
"Enlightened management teams have come to realize the
only competitive advantage in the 21st century is not
marketing or even technology," Young said. "The real edge
is in the quality and commitment of the work force."
     The site will be operated as Global Tissue Inc. An
expanded marketing effort, including prominent display of
the union's logo, was part of the announcement.
Emphasizing the new climate after four years of bitter
battles with Shepherd Tissue, management curtailed
operations for 24 hours and encouraged workers from all
shifts to attend and meet top officials from both sides.
Major creditors, including NationsBank, had threatened
Shepherd Tissue with closure since December. The union
worked closely with Kruger officials and city leaders to
forestall closure while a competitive union contract and
a new business plan were developed. Kimberly-Clark Corp.
operated the mill until 1994.
     Young also praised public officials such as Shep
Wilbon, chair of the Shelby County Commission, for
standing by workers and making the mill's future a symbol
of citywide hope for good jobs with a future. In reaching
the new 10-year labor agreement, Kruger agreed to
reinstate eight workers fired during organizing efforts.
     On hand for the special event in addition to Young
were PACE Regional Vice President Lloyd Walters, based in
Memphis; Kruger Vice President for International
Operations Donald B. Wells; and Kruger Chairman and ceo
Joseph Kruger II. Wilbon and Memphis Mayor Willie
Herenton also spoke. Nashville, Tenn.-based PACE
represents 320,000 workers in the paper, industrial,
chemical and energy industries.