Eastern Paper owner plans announcement Future unclear for Brewer, Lincoln millworkers

LINCOLN and BREWER – In the wake of failed attempts to gain concessions from unionized employees, the owner of Eastern Pulp & Paper Corp. is expected to make a major announcement concerning the future of the Brewer and Lincoln mills on Monday.

While no one seems to know exactly what Joseph H. Torras Sr., owner of the Maine-based corporation, will announce, some people fear it may not be good news.

In Lincoln, where the mill is the town’s largest employer and taxpayer responsible for about 33 percent of total taxes, several people said they did not want a repeat of 1968 when the mill closed, leaving more than 400 people without jobs. Working with the town and former employees, Torras purchased the mill after a five-month shutdown.

Eastern Paper in Brewer is the city’s second-largest employer and one of its larger taxpayers, paying about 5 percent of the city’s total taxes.

“Joe Torras intends to meet with members of both unions’ executive committees Monday to tell them how he intends to proceed regarding the future of the mills,” Douglas Walsh, the company’s vice president of operations, said Friday.

Walsh would not comment on what Torras’ plans might be for the two financially troubled specialty paper mills, which employ about 925 people.

Friday’s scheduled talks between Eastern Paper and Brewer union officials were canceled, Walsh said.

Duane Lugdon, an international representative of the Paper, Allied Chemical and Energy Workers International Union, said he was advised Friday morning by company officials that it was canceling the meeting scheduled with Brewer union officials.

“I don’t know what Joe Torras is coming here to say,” said Lugdon. “All I know is that I asked what the agenda would be, and the answer was to discuss Mr. Torras’ plans for the future. What that plan is no one will know until Monday. We will have to wait and see what he says.”

Steve Corriveau, the Lincoln union president, said he was telling everyone to “get back in their foxholes, put their hard hats on and just peek over the top.” He believes Torras will talk about the financial situation of the company.

In the meantime, Walsh declined to comment on whether all future talks with the unions were off. Also, he declined to comment on whether the company would exercise its option to petition the U.S. Bankruptcy Court to vacate or void the current labor agreements at both mills.

Earlier this week, union officials said the issue of worker concessions could be decided by a judge if negotiations between the company and unions were not fruitful.

Eastern Pulp & Paper Corp., the parent company of the Brewer and Lincoln mills, recently filed for protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code. This means the company will reorganize its debt, cut costs and formulate a business plan for the future, which must be approved by the federal court and the company’s creditors.

Torras earlier said he hoped the filing would not affect employees, but economic conditions changed. Declining prices and markets forced the company to seek concessions from workers. About 70 employees were laid off in Brewer, and positions are being eliminated in Lincoln, mostly through attrition. Also, between 8 and 9 percent of salaried positions in Lincoln are in the process of being eliminated.

“It is imperative that you are fully aware of and do not underestimate the seriousness of the economic crisis we are facing,” stated Torras in a recent letter to Lincoln mill employees.

Torras said many mills across the country are facing financial hardships to a point that nearly 10 closed in the previous year.

In two separate votes this week, unionized workers at the Lincoln and Brewer mills both rejected concession proposals. Lincoln workers rejected the proposal by a vote of 206-126. It included a 3.5 percent pay cut effective Jan. 29 and forgoing a 2.5 percent wage increase scheduled for Aug. 1. Instead of giving 3 percent pay increases in 2002 and 2003, the company would give pay increases of 3.5 and 4 percent in those years. For extending the contract one year, the company would give a 4.5 percent pay increase in 2004.

Also, the Lincoln proposal capped the amount the company would pay for the full-service major medical family health insurance plan at $620 a month beginning Sept. 1, or $40 less than it now pays. Employees, who now pay $95 a month, would pick up the difference. Any future increase or decrease in the plan would be shared 60 percent by the company and 40 percent by workers.

Earlier, Walsh said the company did not ask Lincoln union workers to take pay cuts, but had offered them the same health care plan as all salaried workers and Brewer union workers. He said Lincoln union officials preferred other options.

About 62 percent of the 215 union workers at Brewer rejected the proposal.

A five-year contract for the Brewer union, which has about 340 members, will expire at the end of November.

Brewer workers were asked to accept health insurance increases beginning Feb. 1. Union workers, who now pay $17 a month for the family health plan, would pay $80 a month through Jan. 1, 2002. Workers, who now pay $7 a month for the single plan, would pay $33.84 a month through Jan. 1, 2002. After that date, increases would be split 50-50 between the company and employees.

Also, the company wanted to extend the Brewer union’s current contract three months after it emerged from Chapter 11.

Brewer union officials said the rejection vote was indicative of a work force that already had suffered losses and was reluctant to suffer more.

Lincoln union officials said the biggest gripe they heard about the proposal was that upper managers, who had assumed more duties, were getting pay increases while workers were being asked for concessions.

Earlier, Walsh said all workers, union and salaried, were being treated the same. He said all employees – union or salaried- who were elevated to a different position or who assumed more duties, would be compensated appropriately.

Effective Feb. 1, all salaried employees at both mills would go onto the same health care plan proposed to Brewer union workers. The plan is an HMO with a $20 co-pay and a three-tiered drug program. The company’s contribution will be capped at $522.58 per month for a family plan. Salaried employees’ monthly contribution for a family plan will rise from $30 a month to $100 a month.