Verso sale leaves papermakers uneasy about Bucksport mill’s future

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BUCKSPORT — Union officials are fearful the sale of Verso Paper’s Bucksport mill to a Canadian metal recycling company means the end of papermaking at the mill, which opened in 1930 and shut down its last paper machine Sunday.

“I’m a lot less optimistic today than I was last week, for sure,” Emery Deabay of Bucksport, president of United Steelworkers Local 1188, said Tuesday morning. “The company, we know a little bit but not a lot about it. We know they bought the Sartell [Minnesota] mill from Verso and basically tore it down. We’re waiting to see what they’re going to say.”

On its website, the buyer of the mill, American Iron & Metal Co., describes itself as “one of the most innovative recycling companies in the world,” with a focus on metal recycling.

Calls to American Iron & Metal officials were not returned Tuesday.

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The majority of millworkers were told Tuesday afternoon that they would only be needed two more days before being done for good, with Dec. 17 being the last day for most of the workforce of about 500, according to Roger Doyon of Winterport, the vice president of Local 261 and a longtime papermaker there.

The employees had been told in late November that they would work through the end of December to clean and mothball the facility, but Doyon said Tuesday the work was ahead of schedule and many employees would not be needed beyond Dec. 17.

Doyon said he was told an estimated 50 to 60 employees needed to operate a power generating facility at the mill were to continue working as previously scheduled. Other employees working abbreviated schedules until Dec. 17 would still be paid as if they had been scheduled to work through December 31, he said.

Regardless, morale at the mill was very low, Doyon said.

“This is the very worst and the lowest I’ve ever, ever seen it,” he said. “The spirit of cleaning and preserving the mill now is very, very poor. People say what’s the sense? They’re just going to cut it up.”

Bill Cohen, a spokesman for Verso, said late Monday that American Iron & Metal does plan to operate a separate natural gas-fired power generator that it also plans to purchase through the sale, expected to close early next year. He said he did not know any more about American Iron & Metal’s plans.

Deabay, who has worked for many years at the on-site gas-fired power plant, said that millworkers were not given a heads-up about the sale until news was disclosed Monday in a filing with the U.S. Securities and Exchange Commission.

“It’s quite a surprise,” Deabay said, adding that he believes the sale price might be too high for American Iron & Metal to make a profit just on selling the mill for scrap metal. “They haven’t brought out their cutting torches yet. If they paid $60 million, that’s a pretty good price for something they’re going to chop.”

The proceeds from a sale of about $60 million would cover a little more than the amount Verso expects to pay in related shutdown costs. The company said in its most recent quarterly earnings report that the mill closure will cost $35 million to $45 million in severance costs and about $5 million to $10 million in other shutdown costs.

Regarding potential environmental cleanup, both parties agreed there are no pending remediation needs and that Verso would only be liable for costs of fixing historical environmental liabilities or remediation for which it is liable under state law.

Duane Lugdon, head of the United Steelworkers union in Maine, said in an email that he expects American Iron & Metal plans to tear down the mill, although he believes there’s still a foundation for a viable business.

“The assets at the Verso mill are not useless assets like some junk car with no engine,” Lugdon said. “Verso Paper should be ashamed of what it has done in Bucksport, Maine.”

Verso has an incentive for the mill to be salvaged, he said in the email, as it would be a competitor with its other mills, including in Jay, if it continued to operate.

Deabay said he suspects that in order to make money off Bucksport, American Iron & Metal will need to “spin it,” or sell off aspects of the mill to other companies that would operate them at least for a while, but he isn’t sure. He and other workers say they hope they will hear more about American Iron & Metal’s intentions in the next few days.

Already, the Montreal-based company has set up an office on site in Bucksport.

On its website, the company states that when it is contacted by a potential client, specialists arrive on location to evaluate the customer’s needs and create a system for recuperating scrap metal.

The company also has listed locations around the state on its website, all of which appear to be scrap yards that it does not necessarily operate. That includes the OneSteel Recycling facility at 2630 Broadway in Bangor and other OneSteel-owned facilities in Arundel, Augusta, Oakland and Caribou.

American Iron & Metal also was an unsuccessful bidder for the Great Northern Paper mill in East Millinocket.

“I’m totally in the dark, less optimistic, but hoping for the best,” Deabay said.

The last of the mill’s three papermaking machines shut down Sunday.

Union officials and Democratic House Speaker Mark Eves of North Berwick have expressed concerns about Verso making severance payments by early January, under a state law they said requires severance to be paid within one regular pay period from the last full day of work.

Department of Labor spokeswoman Julie Rabinowitz said her department and the attorney general’s office have notified Verso in writing that state law takes precedent over severance terms of the employees’ collective bargaining agreement and will require the company to pay severance within eight days of an employee’s last day of work.

She said the state cannot take any action until Verso violates state law, failing to pay severance within that timeframe, but that the state would sue the company on the workers’ behalf if it does not comply.

Tennessee-based Verso is separately pursuing an acquisition of NewPage in a deal that is pending antitrust approval from federal regulators. NewPage in October agreed to sell its Rumford mill to the Canadian company Catalyst Paper to address concerns that the joint company would control too much of the North American market for coated paper.

With the closure of the Bucksport mill and Rumford sale, the joined company would have just one mill in Maine, in Jay. Verso, backed by the investment firm Apollo Management, bought the Jay and Bucksport mills from International Paper in 2006, for about $1.4 billion.

Doyon said some of the papermakers are going to take jobs elsewhere in Maine — including at the Bath Iron Works shipyard and at Huhtamaki, which manufactures consumer packaging, such as paper cups and molded fiber containers, in Waterville.

Doyon said a lot of the workers are busy figuring out what they have to do to sign up for unemployment benefits, to sign up for health insurance through the Affordable Care Act and to complete the other paperwork that goes along with losing their jobs.

“Some of the guys have never had to use a computer,” he said.

Andy Lacher of BookStacks in Bucksport said Tuesday he was trying to stay hopeful, although he acknowledged that with 50 percent of Verso employees living within the four towns of RSU 25 — Bucksport, Prospect, Verona Island and Orland — the ripple effects of the lost jobs would likely be painful.

“It could very well double our tax bill,” he said. “But that’s not likely. You can’t get blood out of this rock.”

The towns might have to cut services — including, he feared, positions in the school district, which employs his wife. That would hurt, Lacher said.

“We’re hand to mouth, we really are,” he said.

Longtime millworker Harland Grant of Bucksport, who made paper for 42 years before retiring a few years ago, had hard words Tuesday for Verso and its decision to close and sell the mill that long has dominated the skyline and the economy of his town.

“Every time the mill changed hands, it got worse,” he said while sitting in his car on Main Street in Bucksport. “It’s still hard to believe this mill can’t make money. It’s just sad. Somebody’s got to make paper.”

Grant remembered that not long ago, Verso was awarded nearly $10 million from the 2009 Recovery Act. The money was intended to be used to reclaim energy wasted in manufacturing at the company’s Bucksport, Jay and Sartell, Minnesota, paper mills.

“Where did that money go?” he asked. “These companies fill their pockets. They rape the towns and they leave. It leaves the towns upside down.”

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