OLD TOWN – Half of the employees of Georgia-Pacific Corp. in Old Town are now unemployed.

G-P officials announced Friday morning that it will permanently stop producing tissue at the plant, and will also shut down its 13 converting lines. These lines make individual rolls of paper towels and bath tissue products.

Employees in the pulping operation, who make up the other half of the work force in Old Town, will remain on the job.

“Approximately 300 employees will be affected by the closure of these tissue manufacturing assets,” said David Spraley, the company’s senior vice president of consumer products manufacturing. “All of the tissue manufacturing and converting operations were permanently shut down today.”

Employees who worked the night shift were informed of the closure at the 5:45 a.m. meeting and employees who were scheduled to start their shift at 6 a.m. were redirected to the 8 a.m. meeting at the training center, where they were told of the shutdown. Approximately 150 employees attended the meeting.

“I was scheduled to work this morning,” said tissue operator Nick Montrose. “They [company officials] said we have all these other mills in the country and we don’t need you. This mill made $42 million in the black last year. I’ve been there 25 years and this just ain’t right.”

Most employees were shocked, said 23-year veteran G-P employee Vernard King, who worked in stock prep at the company. He added the employees also felt used, especially after accepting concession and pay cuts during last year’s contract deliberations.

The fact that the mill made money and is still being closed angered some of the employees, according to Butch Leland, a 231/2-year G-P veteran.

“David Spraley stood up there and told us this is not happening because this mill is not making money, and he said it wasn’t because of the employees,” he said. “That made it more of a kick in the ass. We would have felt better if they told us that we’re not making money. They made millions and they’re shutting us down. It’s a direct insult to the people who work there.”

The reasons behind the shutdowns have to do with “the overcapacity of paper, the mill’s geographic location and the high cost of energy and raw materials,” said Spraley.

Another big reason is that there are too many paper machines, said Old Town mill controller Rick Douglas.

“We have too many machines throughout the country that make this profitable product,” he said. “The higher-cost machines are being curtailed or shut down. Our No. 1 machine is not able to make the new Brawny Towel because of new technologies that have been added in Louisiana and Oregon” that cannot be used in Old Town.

The mill’s manager was visibly upset when he informed the media of the shutdowns.

“This is a tough day for the community and the employees. It’s a huge loss,” said Ralph Feck, who also serves as vice president of Maine operations for G-P. “It’s an emotional thing to lose half of the work force. This is not a good day for Old Town. This is not a good day, but there is still a mill left.”

Terminated hourly employees will be paid for a 60-day period starting on Friday, along with unused vacation time.

“It’s very important for us to be able to pay people for the next 60 days in a lump sum so that they can start to focus on where they are going next,” said Feck.

Salaried employees are eligible for severance benefits and hourly employees who are permanently laid off as a result of the decision are also eligible for severance pay.

“This is an extremely difficult decision because it affects so many of our team members,” said Feck. “The elimination of our tissue manufacturing capability is in no way a reflection of their hard work and dedication over the years and we will be doing all we can to help them through this transition.”

The company will be assisting laid-off employees with unemployment and other benefits and will provide personal and family counseling as well. The mill’s human resource department, along with Maine’s state employment office, will also offer outplacement assistance.

“During that 60 days, through June 2, the company will be picking up 100 percent of the health benefits,” said Douglas.

The Atlanta-based company said tissue production at the mill would be shifted to G-P mills elsewhere in the United States.

The mill’s tissue shipping warehouse will continue to operate until the tissue inventory is gone and the company will continue to employ approximately 300 people, for now.

“The remaining employees for the pulping operation will be running the pulp mill,” said G-P senior communications manager Robert Burns. “They’ll be running the pulp drying, which dries the pulp and there will be maintenance people who support the operations. And there will also be people to run the powerhouse, who help run the recycling portion of the business of the Kraft cooking chemicals. Our recovery boiler, administration and other support services will also stay on board.”

Guarantees that the company’s pulp operation would continue could not be made, said Feck.

“I can’t tell you the pulp business is not in jeopardy,” he said.

Company officials met with Gov. John Baldacci and a task force the governor formed to help industries in Maine preserve jobs in the state on Thursday.

“We are still evaluating the long-term plans for the pulping operations,” said Spraley. “Ralph Feck and I met with Gov. Baldacci yesterday [Thursday] to begin examining ways to enhance the pulp operations’ long-term viability.”

The company is taking a proactive approach to keep its pulp business running.

“We have specific strategies that we’re going to immediately begin exploring, including a new on-site wood yard that will help reduce our pulp costs dramatically,” said Douglas.

Some millworkers said that when the government allows big businesses like G-P to take over companies in Maine, it destroys the small business and in turn surrounding communities because all the big companies care about is profits and they forget about the employees.

“Big business just doesn’t care. This [shutdown] will cause a ripple effect,” said Leland. “I’ve donated stuff to the Millinocket people. Now I’m in the same boat.”

Burns said Old Town is not the only mill affected in the 14-member G-P family but is the only mill with permanent layoffs. He said approximately 50 percent of the other mills have seen some sort of cuts.

“We have other paper mills that have idle machines,” he said. “Those, however, are temporary curtailments.”

He went on to say the mill’s tax revenues for this year will not change.

“For 2003, there will be no impact” said Burns.

Douglas said he couldn’t say how 2004 would be influenced.

“We’re going to begin discussions today,” he said. “We have a lot of work to do and it’s too early to tell.”

The 2002 tax revenue from the mill totals $3.3 million and makes up approximately 35 percent of the city’s tax rate. What Douglas did say was the two shutdown tissue machines are the moneymakers for the company, so he expects the revenues to drop.

“The retail production business is a higher margin across all of our businesses,” he said. “The pulp business is more of a commodity, and commodities need to compete more on a low-cost basis.”

Top G-P officials met with Old Town officials on Friday afternoon. The feeling at City Hall was pretty dismal, said Old Town Mayor Alan Reynolds, after the news of the cuts had spread.

“It’s devastating to those people who lost those jobs. When you have 300 workers put out of work, it affects the whole community,” he said. “Everybody probably has somebody in the family who works there or has a neighbor who works there. We’re looking to see what we can do and where we are with everything. We’re looking at the budget now, and, yes, it will affect that.”

He added that work on the Helen Hunt Elementary School and the fire station may be curtailed because of the G-P cuts but said the decision is still in the works.

Old Town City Manager John Lord said the shutdowns have caused concern at City Hall because of the large number of people the company employs and the property tax revenues.

The two Old Town tissue machines made approximately 9.2 million cases of Brawny, Vanity Fair and Quilted Northern bath and napkin products a year. Georgia-Pacific said that prior to the layoffs, the mill’s annual payroll exceeded $30 million.

Several lawmakers have stepped forward to help the laid-off G-P employees.

U.S. Sen. Olympia Snowe, said her office is working with state and local officials, along with the Training Development Corp. in Bangor, to coordinate a retraining meeting for workers.

“Major layoffs like these have an effect that ripples through the community and it is my hope that the Trade Adjustment Assistance program can quickly retrain these workers in new fields and assist the community in returning to normal,” she said in a press release.

U. S. Sen. Susan Collins said the layoffs “will be a terrible hardship for the workers, their families and the city of Old Town.

“My staff has been in contact with the company and the president of the labor union there to offer assistance to the workers,” she said in a press release. “In addition, I have already pressed the U.S. Department of Labor to assist the workers at the idled mill, and I will remain in close contact with the department to ensure that they receive assistance in finding new jobs.”

U.S. Rep. Michael Michaud said Maine has lost 23,000 manufacturing jobs in the last eight years and that the job market has fallen on hard times.

“The pulp and paper industry, a staple of our economy, has had a difficult few months with several layoffs and closures,” he said in a press release. “It is time to address the trade policies that have proved to be so crippling to our workers here [and] throughout the nation.”

The governor responded to the shutdowns by stating his support for the residents of Old Town.

“The workers of Georgia-Pacific, and all residents of the Old Town area, need to know that state and local officials are concerned about their situation and are moving quickly to lend a hand,” Baldacci said in a press release. “This will be a challenging time for employees, their families and people throughout the community. But we will stand with them, and take all appropriate steps to help them during this time of transition.”