MILLINOCKET – Great Northern Paper Inc. announced Tuesday it is shutting down half its paper machines in the Millinocket mill, eliminating about 200 jobs.

Company officials announced plans to shut down two of the mill’s oldest paper machines during meetings with various employee groups and union leaders. The move could be effective as soon as late this week.

Great Northern employs about 1,300 at its Millinocket and East Millinocket paper mills.

“Due to continuing weak market conditions, GNP plans to discontinue production on paper machines No. 7 and 8,” said GNP President Eldon Doody in the announcement to employees.

“The decision to reduce operations was difficult, but it is necessary in order to compete in today’s markets,” said Doody. “Staffing reductions are resulting from the production shutdowns and a full review of operations. Part of the reductions have already taken place through attrition and other changes.”

Earlier, the company indefinitely shut down its off-machine coater complex, which places a glossy coat on paper, and its super calendar at Millinocket, which applies a finish to the surface of paper. Those shutdowns affected about 30 people.

Doody said the indefinite production curtailment of the two paper machines will affect about 170 hourly and salaried production, maintenance and technical positions at the Millinocket paper mill. It also will affect about 30 positions at the East Millinocket paper mill.

Tuesday’s announcement ended months of speculation among workers and brought mixed reaction.

“I don’t think people are surprised and some people have been expecting it,” said Rodney Daigle, a local union leader. He said some workers are angry because the company told them the machines would run as long as there were orders.

Brian Stetson, GNP’s manager of governmental affairs, said the reduction in staff will go beyond people who work on the two paper machines and will affect people in departments throughout the company.

Company officials said a voluntary retirement incentive plan will be developed with union leaders.

“It is our hope that we can work out with union leadership a retirement plan that eligible employees will elect to take to minimize the number of people affected by this announcement,” said Stetson. “We hope to begin discussion with union leadership next week.”

Stetson said it is unlikely the two paper machines will ever start back up.

The two paper machines had just been re-started Monday after being shut down for more than three weeks. The machines produce coated and uncoated specialty groundwood papers such as advertising fliers and catalogue papers.

Company officials said the No. 10 paper machine at Millinocket will continue to produce coated matte paper, which is used in textbooks. The No. 11 machine also will continue to operate. It produces specialty papers used in a variety of products.

Doody said the company still can compete in the market place.

“The conversion of the East Millinocket mill to lightweight groundwood specialties and the rebuild of paper machine No. 11 at the Millinocket mill to super calendar grade A have solidified Great Northern Paper’s product lines,” said Doody.

Millinocket Town Manager Gene Conlogue said he was disappointed by Tuesday’s announcement. “These reductions are significant to our area,” he said.

Conlogue said voluntary retirements could help ease some of the economic impact of the layoffs.

Lucien Deschaine, an international representative for the International Union of Paper, Allied Chemical and Energy Workers, said the biggest disappointment was to be told the shutdown had nothing to do with workmanship or the productivity of the workers, but that it was market-driven.

He said the machines were being shut down because of the strength of the U.S. dollar, which is causing an influx of paper from European competitors.

“It had to do with the environment outside of our control, which is disappointing,” he said. “It opens our eyes to the fact that at some point we are going to have to have some type of government intervention to protect this industry. A lot of these other countries are subsidized, yet there are no tariffs to protect us in this country. It is another example of the worker being on the receiving end.”

He said it is time members of Maine’s congressional delegation realized workers were not just crying foul.

Deschaine said the company is willing to sit down with the union and discuss a voluntary retirement incentive with some medical premium attachment. “At least there is an attempt to buffer the blow a little bit,” he said.

Meanwhile, U.S. Rep. John Baldacci and U.S. Sen. Susan Collins announced they are working to find federal assistance for the displaced workers.