IP hears offer to buy mill

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BANGOR – Union officials on Wednesday offered International Paper $3.49 million to buy the Passadumkeag stud mill, and Machinist Union officials asked the company to reconsider its decision to close the Costigan mill.

The proposals, which were presented to IP corporate Vice President C. Wes Smith in two separate meetings at a Bangor hotel, come in the wake of the company’s announcement last month to close its lumber operations at both mills in April, leaving about 230 people without jobs.

The offer to buy the stud mill for $3.49 million was made by Maine Wood Innovations LLC on behalf of the Passadumkeag Employees Buyout Association. Officials of the two unions said IP executives asked questions, listened to their proposals and said they would get back to them.

IP officials made no commitments about the proposals.

Rick Ouellette, an IP spokesman, said Wednesday he could not say one way or the other how the company might react to the proposals. He said the company would make a decision in a timely manner.

“Our position remains that we have thoroughly evaluated all available options and determined to maintain these sites as chipping operations as our best alternative, but it is very important to recognize the interest of affected employees involved in this decision,” said Ouellette during an interview on Wednesday.

“We realize our decision affects many excellent employees and their families,” said Ouellette. The spokesman said the company would continue to work hard to assist employees through the transition process by making them aware of other job opportunities at IP and through other companies.

Both company and union officials described the meetings as courteous and congenial. Union leaders said IP acknowledged that they had received many calls from Maine residents and the state’s political leaders.

“We are making an offer we think is responsible and credible, something we don’t think they would dismiss out of hand,” said Duane Lugdon, an official of the Paper, Allied Chemical and Energy Workers International Union. He said IP officials have a fiduciary duty to their shareholders to at least consider the offer.

“Our objective is to put people back to work,” said Lugdon, who represents Passadumkeag workers. “If we can reach some kind of accord with IP, it will be better for everyone,” he said.

Lugdon said the sale of the Passadumkeag mill would be a win-win situation. He said IP would recapture capital and would eliminate the fixed and overhead costs associated with the mill sitting idle. The town of Passadumkeag would have a tax revenue stream. State and federal governments would have payroll tax revenues.

“Everything gets fixed with the sale and IP could do a lot to promote its image within the state,” said Lugdon.

The union leader said the offer to buy the mill was contingent on a financial review. He said the union has an experienced management team. Dave Thompson, the former mill manager who retired last fall, was willing to manage the facility. “We have great confidence in him. He knows the mill like the hair on the back of his hand,” said Lugdon.

Robert Baldacci Jr., president of Maine Wood Innovations, said the company was working in close partnership with the employee buyout group.

“It all starts with the people,” said Baldacci. “The thing that makes this work in Passadumkeag is the quality and the dedication of that work force. Our belief is with the right structure and the right team in place, we can make that facility a success,” he said during an interview Wednesday.

Baldacci said there was much work to be done. “This is not an easy thing to pull together because the market right now is terrible, but we have a team of people, a facility that has demonstrated it can work,” he said. “It [the mill] does need investments and new equipment and we believe we have the team to put it together, but it goes back to whether IP will agree to work with us.”

Baldacci said the company’s focus was to open the mill as a stud mill producing the same products – framing lumber. He said over time, the new owners would work closely with the University of Maine to produce other kinds of products at the mill.

“We strongly believe that the products from that mill do not in any way, shape or manner compete with any other product that comes out of any other IP mill,” he said.

Union leaders and Baldacci said they would love the opportunity to structure a contract with IP to provide chips for its Bucksport mill. “We would make whatever investment necessary to do that on a long-term basis,” said Baldacci.

In the meantime, Costigan union leaders have asked the company to reconsider its decision to close the stud mill.

“I hope the company will seriously consider our offer,” said David Lowell, a machinist union official who represents Costigan workers. “It’s a long shot, but the bottom line is IP has nice deep pockets to roll with the punches and flows in the economy better than the employees can.”

Lowell said if the company is unwilling to reconsider keeping the Costigan mill open, the union will ask IP to consider selling it to them.

If the company is not willing to reconsider or to sell the mill, Lowell has asked they leave all of the equipment there for an indefinite period of time. “If the market turns around and the equipment is still there, we might be able to start the mill up again, but if the equipment is removed, it will never be started,” said Lowell.

The principals of 1-year-old Maine Wood Innovations are:

. Baldacci, president of his own real estate development and management company, who has more than 25 years of experience in private- and public-sector development projects throughout the state and country. He was the first chairman of the Finance Authority of Maine and past vice chairman of the Maine Guarantee Authority.

. Habib J. Dagher, Ph.D, a professor of civil engineering at UM, who is the director of the university’s Advanced Engineered Wood Composites Center. He has organized and conducted cutting-edge research in advanced wood composites and is a leading expert in the field.

. Edward B. Laverty, Ph.D, an associate professor of public administration at UM, who is the founding dean of the university’s College of Arts and Humanities and founding president of the American University in Bulgaria. He has more than 25 years of experience working with local, state, federal and international agencies.

. George N. Campbell Jr., president of PA Strategies, a Portland-based economic development consulting group. He is the former director of the Maine State Development Office and former commissioner of the Department of Transportation. He has successfully worked with many Maine businesses.

. George Markowsky, Ph.D, a professor and chairman of the computer science department at UM. He is a former research associate at IBM’s Thomas J. Watson Research Center, a founder and president of Maine Software Developers Association. He is converting Ayers Island in Orono, the site of a 62-acre abandoned textile mill property, into research laboratories and advanced technology manufacturing facilities.