November 24, 2024
Business

Officials seek funds to reopen GNP mills

BANGOR – Great Northern Paper Co.’s decision to file for bankruptcy protection Thursday had congressional and legislative officials scurrying to try to secure financing to reopen the company’s two plants already shut down for more than two weeks.

U.S. Rep. Michael Michaud, an employee at GNP’s East Millinocket mill for 29 years, on Thursday evening said the Chapter 11 bankruptcy filing, which gives a company protection from creditors while it reorganizes or seeks a buyer, “does not necessarily mean that employees will be laid off.”

But, he added, in the short term an infusion of cash is needed to get the plants up and running again, and to stay open. And in the long term, Congress should revise the North American Free Trade Agreement to stop low-cost imports from Canada and overseas from flooding the United States’ paper products industry.

Federal grants or loans, however, and not state money may be the only governmental options, Michaud said.

“The issue is: Where is the state going to get the money?” he rhetorically asked. “The state can’t do that. It’s in financial hardship right now.”

Michaud said he planned to meet with Gov. John Baldacci after the governor’s inaugural gala Thursday evening to start developing a plan and forming a task force to save the largest employer in Millinocket and East Millinocket. Also scheduled to attend the late-night meeting was Sen. Stephen Stanley, D-Medway.

Michaud said he also was trying to set up a meeting with union officials for today, but details had not been worked out by 7 p.m. Thursday.

At the State House, GNP’s bankruptcy filing dampened the level of enthusiasm as Gov. Baldacci began his first day on the job. Baldacci on Thursday spoke with the owner of Great Northern and the legal counsel for the company’s creditors, said Lee Umphrey, the governor’s communications director.

“He is very concerned and will monitor the situation closely by first sending a representative to attend the hearing in Bangor [on Friday] and also by asking the Department of Labor and the Department of Economic and Community Development to work closely with the governor’s office in protecting the workers,” Umphrey said.

Michaud acknowledged that not much effort had been made by elected officials to secure financing to keep open the mills until Thursday’s bankruptcy filing. He said that help wasn’t needed until Thursday.

“The company has been working on their own to do that,” Michaud said.

He mentioned that last summer GNP reached a $50 million deal with The Nature Conservancy that at the time saved 1,100 jobs. In exchange for purchasing 41,000 acres in the Debsconeag Lakes area and obtaining a conservation easement of 200,000 acres of Great Northern’s forestland, The Nature Conservancy agreed to pay $50 million of the paper company’s existing debt.

Michaud also noted that GNP sold its six hydroelectric power stations and 11 dams for $156.5 million to Brascan Corp.’s Great Lakes Group early last year. Money from the sale was used to upgrade GNP’s largest paper machine at the Millinocket mill.

Like Michaud, U.S. Sen. Olympia Snowe spent most of the evening talking with GNP officials about options to reopen the paper mills. In a prepared statement, Snowe stated that she was “already investigating options to secure financing that can help Great Northern resume production.”

Snowe’s spokesman, David Lackey, said it would be premature to mention what those financing options might be.

“I don’t want to detail specifics yet,” he said.

State House reporter A.J. Higgins contributed to this report.


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