NewPage shutting down paper machine, laying off workers

Sun Journal File Photo

The NewPage paper mill in Rumford

RUMFORD — NewPage said Tuesday it would shut down a paper machine "indefinitely" at the local mill in mid-February because of tough economic conditions.

The Rumford mill

Hugh J. Chisholm Sr., a Canadian entrepreneur who became an American citizen in the 1870s, established the Oxford Paper Co. in Rumford in 1901 when he was 54 years old.

The mill opened with four paper machines; all of the postcards distributed by the U.S. Postal Service were manufactured there.

Two decades later, 10 machines were operating at the plant, making the mill the world’s largest paper producer operating under one roof.

Chisholm’s planned community for workers in Rumford’s 30-acre Strathglass Park became a housing model for other mill communities. He drafted the country’s first forest management program while at International Paper Company.

Chisholm died in 1912.

Oxford Paper Co. was sold in 1967 to the Ethyl Corp., a Virginia-based gas, chemical and oil company, and was then sold to Idaho-based Boise Cascade in 1976.

Boise Cascade invested more than $1 billion in the mill over the next 20 years, including constructing a new paper machine, rebuilding other machines, making environmental improvements at the facility and constructing a $180 million cogeneration plant that opened in 1990.

In 1996, the Rumford mill was purchased by Ohio-based Mead Paper for about $650 million.

The mill, with an annual capacity of 490,000 tons of coated groundwood and free sheet papers, allowed Mead to expand its coated paper business, printing specialty paper for National Geographic, Newsweek and other glossy magazines and catalogs.

More than 1,400 workers transferred from Boise to Mead, including the mill’s management team.

In 2002, West Virginia’s Westvaco merged with Mead Corp., forming MeadWestvaco.

NewPage Corp., headquartered in Ohio, purchased the mill in 2005 and has since invested more than $105 million in equipment, process modifications and manufacturing technology into its subsidiary, the Rumford Paper Co.

Today the Rumford mill — which produces all of its own energy — has one Kraft and one groundwood pulp mill, four coated paper machines and supporting equipment and one pulp dryer. Each year, the facility produces an average of 565,000 tons of coated free sheet, coated groundwood and specialty paper and is considered one of North America’s leading producers of printing and specialty papers.

It is the largest employer in Western Maine, with more than 800 employees.

Throughout the mill’s history, no matter the owner, various mill-based outreach programs have helped fund community and youth programs, including Scouts and other nonprofit groups.

Sources: NewPage, Strathglass Park Preservation Society, The Forest Historical Society, The Associated Press and Sun Journal archives.

About 120 workers would be laid off, Local 900 President Ron Hemingway said. The mill employs 830 people.

Mill spokesman Anthony Lyons said the employees were informed Tuesday morning of the shutdown of the mill's No. 12 paper machine, which manufactures coated paper used in catalogs and magazines. The mill produces about 550,000 tons of coated paper per year, Lyons said.

He said the majority of workers affected by the shutdown are hourly workers, and that they would be subject to the provisions in the labor agreement.

“This means last in, first out,” Lyons said. “Many of the junior employees will be affected first. We'll be moving people around to different areas by seniority. Some people will be trained on new equipment.”

He said the company needs until mid-February to fill its ongoing customer orders, "and so we can transition the grades from the No. 12 paper machine to other machines at different NewPage machines at the Rumford paper mill and other mills in the NewPage system. Our production is such that we cannot absorb all of the work that the No. 12 paper machine does.”

About 25 people work on the No. 12 paper machine, "which is a small number compared to how many people will likely be laid off,” Hemingway said. “There are people all over the place in the mill who will be affected, whether it's the re-winder room, the maintenance area or the electrical and instrument room. The whole mill is going to take a hit.”

Hemingway added that while some of the employees would be “bumped” to new areas in the mill that require little to no training, some employees might be shifted to new jobs that require two to four weeks of training.

“For instance, some of the people on the No. 12 paper machine may end up on the No. 10 paper machine, a place they may have already worked before,” Hemingway said. "But there are a lot of places in the mill. Not everyone will be familiar with everything.”

Though a majority of the laid-off workers will be hourly employees, Hemingway said some salaried workers would receive severance packages.

Three paper machines, Nos. 9, 10 and 15, will continue to operate after the shutdown of No. 12, Hemingway said.

“The No. 12 is our smallest, slowest machine in the organization, so of course they have to get rid of it,” Hemingway said. “It's not performing the way they want it to.”

The shutdown of the No. 12 machine is the latest in a series of downsizing efforts that reach back to the late 1990s, Hemingway said.

“I remember between 1998 and 2000, we had five machines shut down," he said. "The paper market is downsizing, and we're downsizing with it. We're competing with other mills that are bigger and better than us, and we need to do better if the Rumford paper mill is going to have a future.”

Mark Lukacs, senior vice president for operations at NewPage said, "We sincerely regret having to make this announcement because of the impact on our employees. We will be working with our Rumford management team to minimize the effects on our employees."

In a recent NewPage news release, the Pulp and Paper Products Council reported that the North American coated paper market "continues to be under pressure due to the continued year-over-year decline of coated shipments and significant increase in imports from Western Europe.”

NewPage filed for Chapter 11 bankruptcy in September 2012, emerging three months later after securing financing led by Goldman Sachs Lending Partners of a $500 million loan plus $350 million in revolving credit led by JPMorgan Stanley Securities.

Last June, 120 workers were temporarily laid off for a week as a cost-containment and money-saving measure. Four months earlier, NewPage cut 5 percent of its workforce nationwide. Those cuts resulted in nearly four dozen mill workers from the Rumford mill losing their jobs.

NewPage is the leading producer of printing and specialty papers in North America with $3.5 billion in net sales for the year ended Dec. 31, 2011. It is headquartered in Miamisburg, Ohio, and owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota and Wisconsin. These mills have a total annual production capacity of about 3.5 million tons of paper.

mdaigle@sunjournal.com

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Comments

This is the last straw Sun Journal

I'm ending my subscription and notifications via email as of the end of this post. Your continued bias news toward our Governor and now your allowance to insult the Governor by calling him names in your headlines. I'm from now on looking to the Twin City Times, The Maine Wire, and Lisbon for my news. They have our best interests at heart and they don't push the agenda that is destroying our State.

Re-elect Governor Paul LePage!

Noel Foss's picture

?

What the heck did i just read?
What the heck did YOU just read?

ANTHONY NAZAR's picture

Huh?

This has to be an attempt at humor. If so, very hard to pull off on the internet where facial expressions and tone of voice are absent.

Then again...

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