MADAWASKA (AP) – Fraser Papers Inc. said Tuesday it’s shutting down three paper machines, eliminating about 135 jobs, as part of a plan at its Madawaska mill aimed at saving $14 million a year.

Fraser will shift production of specialty paper from the two oldest machines to six remaining machines, the company said. The mills, which employed about 100 people, will be shut down effective Aug. 26.

Another 29 employees will lose their jobs in the previously announced shutdown of the groundwood coating line that will become permanent.

“While we recognize the inevitable impact on individuals, families and the community, we believe it is the best course of action to ensure the long term success of our East Papers operations,” said Peter Gordon, Fraser Papers’ president and chief executive officer.

Some of the workers will be eligible for early retirement and the company said it will work with union and government agencies to lessen the impact of the closures.

“This is difficult news for Madawaska and all of Aroostook County,” Gov. John Baldacci said after receiving a call from the company Tuesday. “The Department of Labor and its Rapid Response Teams have been put on notice, and we will do everything we can to help the workers and the community recover.”

The shutdown of the three paper machines is part of a larger package including a $10 million boiler overhaul to boost pulp production at a sister plant in Edmundston, New Brunswick, that’s aimed at boosting efficiency.

The expanded pulp production will reduce Fraser’s reliance on costly purchases of pulp from other vendors, the company said.

“The initiatives announced today will provide a much needed and immediate improvement to our business,” Gordon said.

AP-ES-06-26-07 1958EDT