Fraser to cut 78 jobs at mill Costs at issue in Madawaska

MADAWASKA – For the second time in 18 months, Fraser Papers Inc. announced layoffs Thursday night that will cut 78 jobs from the Madawaska-Edmundston complex.

The newest cuts, which will be completed by March 31, 2005, will bring the work force down to fewer than 1,200 employees. In December 2002, the complex employed 1,591 people on both sides of the St. John River in northern Aroostook County and Canada.

The Madawaska-Edmundston complex is the flagship of the Canadian-based papermaking company.

The company’s Thurso, Quebec, mill is also cutting 60 jobs from its pulp mill operation.

“We are restructuring, eliminating nonvalue-added functions,” Richard Marston, director of human relations of the Madawaska mill, said Friday morning. “This is part of a continual process to ensure that we are staying competitive.

“We have to bring down the costs of the operations to maximize the return on the operation,” he said. “We announced this locally to employees on Thursday.”

Marston said he had no examples of what nonvalue-added functions were, but simply explained that those that are found will be eliminated.

The Madawaska paper mill will cut 36 positions from both salary and union jobs. At Edmundston, New Brunswick, 42 salary and union positions will be cut.

One employee, who preferred to remain anonymous, said 13 of the union jobs being cut will see the men placed in a spare pool. The others lose their jobs permanently. The employee said reports were that cuts involved at least 10 salaried people.

The number of jobs at Madawaska will drop to 799. Edmundston will have about 400 jobs left after the cuts are made.

Municipal officials were surprised and concerned by the announcement.

“I wasn’t happy when I heard, and I am very concerned,” Fred Ventresco, town manager at Madawaska, said Friday morning. “We don’t like to hear these things.

“We are hoping these employees will be getting some assistance in finding other work,” he said. “We have contacted the Department of Labor, and we hope there will be retraining funds.”

Ventresco said the announcement was a surprise especially after the company announced last week that it was doing well, that company earnings were up after restructuring four months ago.

“It has been kind of sweet and sour news,” he said. “Our major concern now is that even more layoffs would be a very negative thing.”

James Wetmore, owner of Central Building Supplies at Madawaska, didn’t know what to make of it.

“I just heard this morning,” he said Friday. “I believe they are doing what they have to do to remain viable.

“It’s really too bad because it will hurt families in the community,” he said. “I don’t know what this will do, but I imagine it will hurt us in the business community at some point.”

He said his business was coming off its best year ever. He said such layoffs are “way bigger than most of us.”

Marston said the cuts had not taken effect as of Friday, but they will begin as soon as decisions are concrete and will be done by March 31. He said the company has just started looking at positions that will be targeted.

“No one is out of the door yet,” he said. “We will work our way through that during the next several months.

Reports of cuts started surfacing two weeks ago. Some employees reportedly received early retirements last month. Company officials denied any loss of jobs when contacted two weeks ago.

A week ago, on Oct. 29, the company announced that the company had made $1 million in the third quarter. That was compared to a $10 million loss in the same quarter in 2003.

It was the company’s first quarterly financial report since it went public as a separate company in July. Fraser Papers Inc. was separated from its parent, Nexfor Papers Inc., on July 1.

The paper industry has been in the doldrums since 2002. Scores of paper machines have been shut down permanently, and more than two dozen North American mills have closed their doors.

Marston did not know what is happening, as far as employment levels, in other divisions of the company.