GNP to shut down mills temporarily Weak economy spurs 10-day closure

MILLINOCKET – The ongoing weak economy and a slump in paper markets is forcing Great Northern Paper Inc. to temporarily shut down all production at its East Millinocket and Millinocket paper mills for the second time this year.

The 10-day shutdown of the two paper mills will begin today. It will affect most of the company’s 1,100 employees, except for a very small crew of 80 people. Employees who have vacation time left will be able to use it. Vacations run from May to May.

“A weak economy and heavy imports of paper continue to impact company operations,” said Lambert Bedard, GNP’s owner and chief executive officer, in a prepared statement. “We expect to move quickly to return the mills to full production.”

Brian Stetson, GNP’s manager of governmental and environmental affairs, said the temporary production curtailment of the two paper mills will affect both union and salaried workers in all departments. He said production on all four paper machines at the two paper mills was scheduled to resume on Monday, Jan. 6.

“The issue is orders,” said Stetson. “We have the soft economy and the imports are exacerbating what we have in past years seen as a typical weak demand for paper around Christmas and the first part of every year,” he said.

Stetson said the company’s sales force will be working hard during the 10-day temporary production curtailment to obtain orders for the two paper mills.

“We do have some orders for the start-up of the mills,” he said. “Our intent is to start up all four paper machines on Jan. 6. Our sales force still has some work to do to round out the order book.”

The East Millinocket paper mill produces telephone directory paper and the Millinocket mill produces papers used for advertising and elementary school books.

Stetson said the Christmas holiday was a difficult time to make these types of decisions, both from the standpoint of the effect on employees and in keeping the equipment and the mills operational in cold weather. He said employees would not lose their benefits during the production curtailment.

Stetson said customers would not be affected. “We will continue to ship paper already produced as needed to customers during this period,” he said.

Company officials notified union leaders about the 10-day curtailment Thursday morning. The news quickly spread throughout the region. Many people expressed concern about it. Despite some speculation, Stetson said the decision was “market driven.”

This year has been rough for Great Northern. Difficult markets, a shortage of orders and foreign paper imports have resulted in several paper machine shutdowns this year. In July, GNP announced it was shutting down permanently two older paper machines at its Millinocket mill, which resulted in the loss of 200 jobs. One paper machine at the Millinocket mill – the No. 10 machine – has been down since Nov. 29, affecting about 60 employees. Another paper machine – No. 5 – at the East Millinocket mill has been down since Dec. 16, affecting about 90 workers.

“We are experiencing market-driven down time like other paper companies across the United States,” said Stetson.

Great Northern isn’t the only company in the paper industry facing tough markets coupled with the weak economy. Currently, International Paper’s Bucksport mill is on a 10-day shutdown affecting several hundred employees.

Last week Bowater Inc., Great Northern’s former owner, announced more details about its plan to cut annual costs by $75 million, which will include eliminating 500 employees, permanently removing 100,000 metric tons of newsprint and selling 240,000 acres of timberland and four of its Canadian sawmills.