How will AbitibiBowater know when they've consolidated enough?

Implications: Standard grade newsprint annual tonnage has been declining since 2000 as circulation goes down, advertizing pages drop and classified ads decrease.   Could anyone have predicted that the Internet would have such a profound effect on newspaper circulation?   Supposedly no one under the age of 35 reads newspapers any more.   Can this direction ever be reversed?  What would it take? AbitibiBowaters claims it has already shut down 1 million mt of high-cost capacity.  Will this be enough?  How many of their  remaining 27 paper mills are now "at risk"?

Analysis: The North American newsprint industry has seen demand drop from a high of 15 million tons/year in 1999 to its current level of two-thirds that amount.  Will the move to "groundwood specialties" or SC or "coated groundwood"  be enough to keep all the mills running at 93% capacity?  These are very difficult problems to face since it's so impossible to predict what absolutely essential price increases will have on publishers' circulation when they are forced to raise single copy prices by 25 cents.  Newsprint's transaction prices last summer were as low as US$540 for the biggest conglomerates (vs. a list of $565).  Two price increases have been grudgingly accepted bringing the current list to $625 for most buyers.  The $60/st price increase had to be implemented $20/month through the first quarter.  Producers are now telling N.A.customers that they must get their prices up to the European level of $725-750/st in order to be profitable.  Many industry observers believe this price level will be achieved by the first quarter of 2009...but, what will the effect be on demand as publishers begin to charge $1/copy?  Dailies in the UK now sell for the equivalent of US$1.20/copy and the public has apparently accepted this as "normal"  Will North American readers react similarly?
AbitibiBowaters' stock took a hit last week after the company announced a 4Q loss of $250 million and a full year loss of $490 million. Part of this loss can be attributed to the closing of almost 1 million mt of capacity as mills in New Brunswick, Ontario and British Columbia were shuttered.  Certainly, to their credit, A-B has quickly set about to correct the imbalance between supply and demand but now the question is "how many more mill closures are needed"?
The DOJ forced the company to sell its well situated mill at Snowflake, AZ which they owned jointly with Smurfit-Stone.  The fact that they were able to get $180 million from Catalyst attests to its profitability.
A-B also has a number of other profitable mills - their market pulp mills along with the pulp and paper mill at Catawba, SC just to name a few of the "jewels in their crown".
Most observers believe the company has a bright future and will ultimately be very successful as well as reasonably profitable.  But for now it's a very painful process but one that can't be avoided.