Rising fuels costs and a soft economy put about 80 people out of work in what is hoped to be a temporary shutdown.

LISBON – The town’s third-largest employer has closed indefinitely, citing higher operating costs and a drop in demand for its eco-friendly fiberboard.

The delivery gate at Knight-Celotex on Route 196 was closed Friday morning with only a skeleton crew still on site. An attorney for the company said management hoped the shutdown would last only a month, but they were considering it an indefinite idling of the plant that would be reviewed week to week.

“Two things have had a dramatic impact,” said Charles Micoleau, general counsel for the Chicago-based company. “One is the generally soft economy, which has produced a reduction in sales. That is coupled with dramatic changes in a short period of time in energy prices.”

Micoleau said about one-third of the plant’s operating costs are energy-related. Spikes in natural gas and electricity costs were of particular concern to managers.

“Both are very high compared with other Knight-Celotex facilities,” he said.

The plant makes fiberboard that is custom-finished for different applications. About 80 employees – salaried and hourly – are affected by the shutdown.

Micoleau emphasized that the shutdown had nothing to do with an April vote to bring in the machinists union. The company challenged the vote to the National Labor Relations Board, which ruled in favor of the International Association of Machinists in June.

“I want to make it very clear that this has absolutely nothing to do with the recognition of the union or the bargaining that is about to begin,” Micoleau said.

He said anyone driving past the plant would notice the stacks of fiberboard waiting to be shipped. The curtailment allows for the excess inventory to be sold, he said.

He expects the plant to reopen once the overstock is gone, customer orders pick up again and there are satisfactory energy arrangements.

“The company will be conducting an ongoing review of economic conditions,” he said. “As the market has softened, there have been efforts to reduce costs and economize throughout the company.”

The Lisbon plant is the only Knight-Celotex facility to stop production, said Micoleau, although the other three plants have “tightened their belts.” The other production facilities are in Sunbury, Pa., Marrero, La., and Danville, Va.

The stoppage came as a surprise to town officials. In addition to being a major employer, Knight-Celotex is also one of the biggest taxpayers with last year’s bill totaling more than $178,000.

Town Manager Stephen Eldridge said a conversation with the plant’s manager several months ago indicated the company was doing well.

“They were talking about manufacturing a new product here,” Eldridge said. “They sounded like they were on solid ground and encouraged.”

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