Saving paper

The Legislature’s Business and Economic Development Committee was right to endorse a bill to assist employee-led buyouts of paper mills. Given the unusual circumstances and the apparent lack of faith some lawmakers have in the state’s workforce, the unanimous ought-to-pass vote was, in fact, exactly right.

L.D. 2222, An Act to Retain Jobs at Paper Production Facilities, expands he ability of the Finance Authority of Maine to help workers keep their livelihoods alive. It adds paper mills to the list of business eligible for state job-retention assistance and increases FAME’s bonding cap from $25 million (not much good for something the size of a paper mill) to $120 million. The bill, sponsored by Rep. Michael Michaud and driven by the possible closure of the Great Northern plan in Millinocket, strikes a good balance between protecting the state’s interests and preserving some of the best jobs rural Maine has to offer.

The tricky part was that the very successful public hearing on the bill was held on the same day last week that Bowater announced the sale of all its Great Northern holdings in Maine to Inexcon of Canada. Worker concerns that the sale might not go through could have been seen as needless worry and the bill, a bit too bold and innovative for some tastes, could have been shelved.

It wasn’t, but some of the testimony given before the committee’s vote makes it clear that the economic future of rural Maine is not at the top of everyone’s agenda. It’s shocking to hear legislators wonder aloud whether the state’s paper industry is worth saving or whether FAME is up to doing the job it’s done long and well or whether paperworkers just ought to be retrained and relocated. The administration’s recommendation that this program end next January, making it a one-time shot for Millinocket only, indicates a failure to appreciate that there are 15 other mills in Maine, in various states of condition, productivity and uncertainty, all crucially important to their communities. No one expressing reservations about the bill seemed aware that bond banks and other investors (necessary in a deal of this size) would be on the lookout for any flaw in the event FAME missed something.

Almost as troubling is the impression given by some economic policy makers that employee stock options, the means by which buyouts are accomplished, are something new, untried, inherently risky. Thousands of companies have employees as part owners — BellSouth, United Airlines, Allied Signal, Merrill Lynch, Proctor & Gamble to name but a few — and where employees have an ownership stake, gains in productivity and profits are common.

There is a wealth of information available about employee stock ownership, about its use as a benefit in successful companies, about its value in saving troubled factories and thousands of jobs. Legislators could review it before a final vote. Or, they could simply consider this: Maine had a net loss of 900 of its best-paying manufacturing jobs last year, a number likely to be topped this year just by losses in paper mills and shoe plants. That may be all lawmakers need to know.