New exodus feared if Katahdin mill closes

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MILLINOCKET – Chris Dickinson and Paul Levasseur are pretty sure that if runaway oil prices force Katahdin Paper Co. LLC to close its 208-worker paper mill in 59 days, they will leave the Katahdin region – probably for good.

“You have to go where the work is,” Dickinson, a 46-year-old millwright, said as Gov. John Baldacci toured the Katahdin Avenue facility on Friday. “I’ve been to Massachusetts, Virginia and Connecticut since the last layoff. There was even a bunch of guys from here who went to Chile, years ago.”

“I really don’t see there being a lot of opportunity for work around here if this goes,” said Levasseur, a 40-year-old electrician. “It’s pretty depressing to see a place with the history that this has closing its doors. It will affect the entire town, across the board.”

Levasseur knows about 50 other workers who he said also are likely to move out of the region.

If the mill, one of the Katahdin region’s largest employers, shuts down, Levasseur and other workers predict that another massive out-migration will occur, such as happened in 2002 and 2003 after Katahdin Paper’s predecessor, Great Northern Paper Co., closed the Millinocket mill and another it owned in East Millinocket.

Branscan Corp. of Toronto, now called Brookfield Asset Management, bought both mills in 2003 and reopened them as Katahdin Paper.

Schools, town government, local businesses – or what’s left of them after the last exodus – all will be devastated. Most, they said, are still recovering from the first closure, which helped slash the town’s population from close to 10,000 residents at its peak to about 5,300.

“It’s going to affect everybody,” said Gary Rush, a 62-year-old machinist from Millinocket. “There might not be much left here.”

“It’s pretty sad when the three best businesses in town are two art galleries and a hardware store,” said Philip Sturman, a retired researcher at the mill when it was owned by the Great Northern Paper Co. “When the hardware store goes, I go.”

The Millinocket School Committee’s push for almost $800,000 in additional local funding, which school officials said is crucial to maintaining basic educational services, will be the first thing wiped out, Rush said.

During their tour of the mill on Friday, Baldacci, U.S. Rep. Michael Michaud, representatives from the offices of U.S. Sens. Olympia J. Snowe and Susan Collins, state Rep. Herbie Clark of Millinocket, and Town Manager Eugene Conlogue tried to shine rays of hope on the gloom.

Baldacci reassured workers that the weight of state government was behind efforts to keep the mill running beyond the July 28 deadline company officials set Thursday for shutting down indefinitely.

“I don’t want to lose these jobs,” Baldacci said Friday. “We will have a strategy to deal with this well before the 60 days [lapse]. We will have a direction, we will have a light at the end of the tunnel because this is a solvable problem.

“This will be number one on my list, every day,” he added.

Almost relentlessly upbeat, Baldacci extolled the plant’s No. 11 paper machine – Maine’s youngest such machine – as a $150 million value in today’s dollars.

The mill’s being booked with orders for catalog, magazine and retail industry fliers through 2008. Its high customer satisfaction level and its skilled, experienced work force help make Maine one of the nation’s top paper-producing states, he said.

“There’s such a thing as false hope and such a thing as realistic hope,” Conlogue said. “This place has a realistic hope.”

“It’s not that you don’t have the workers, or the orders,” Michaud said. “You do. It’s the use of oil, and its cost, that is the problem.”

As with everything else in the U.S. today, energy and transportation costs are the biggest problems facing the mill, Baldacci said, calling the energy squeeze a war that all Americans must get behind to win.

“We can’t worry about the past,” Clark said. “It’s easy to point fingers. We have to work together to deal with the present.”

Workers were polite but skeptical. Some said that Katahdin Paper’s shutdown message Thursday was pretty final: Runaway oil costs made profitably operating the plant impossible, especially if per-barrel prices climbed from $127 a barrel Friday to beyond $200 a barrel, which analysts predict will occur in 2009.

Entirely fueled by oil, the plant used more than 400,000 barrels in 2007 to produce its steam and heat. Increasing prices for diesel fuel, pulp and wood also hurt.

“If I had to put a percentage on [a total shutdown], I would have given it 75 percent yesterday,” said Louis Ouellette, president of United Paperworkers International Union Local 152 of Millinocket. Friday he said he was more optimistic.

Company officials told union workers that it would take as much as a $50 million investment over the next two years to install a biomass boiler to power the plant and cover expenses during the 18 months to two years it would take to get the boiler running, said Terry Whirty, president of United Steel Workers Local 12. Separately, company officials speaking to the Bangor Daily News on condition of anonymity placed the cost at closer to $40 million.

“We need an investment,” Whirty said, “and our management has told us that with a biomass boiler we would be oil-free.”

Among the options state officials are considering, however, that idea, which company officials have been examining for more than a year, is not the most viable, Baldacci said.

“We are not studying that plan,” Baldacci said. “That’s the old plan. We’re looking at a new plan.”

Baldacci and the other leaders met behind closed doors with plant manager Serge Sorokin, personnel department manager Glenn Saucier and other mill leaders for about 30 minutes Friday.

Baldacci said he would publicly discuss options or his plans for the mill as soon as those plans are completed. Talking about them now, he said, would just make them more difficult to achieve.

Thursday’s announcement took workers by surprise, they said. Economic indications from both mills have been largely positive over the past two years. The mills, which hadn’t had a significant layoff since 2003, in January began replacing as many as 300 older workers expected to retire over the next five years. About 25 younger workers have been hired since then.

The Millinocket mill makes catalog, magazine and retail industry fliers. The East Millinocket mill, which employs about 350 and has had booming sales, makes paper for telephone directories.

And the workers on average make about $40,000 per year, about $10,000 less than the state average for manufacturing jobs. Worker and union concessions helped restart the mills in mid-2003.

Many millworkers have over the past year just gotten back into the mill after the 2002-03 shutdown. Some hope they will be transferred to the East Millinocket mill if a shutdown occurs, but that mill might also be targeted, company officials said.

Despite the massive exodus earlier in the decade, the Katahdin region thinks of itself as a mill town – being largely built by mills in the early 1900s. And it’s impossible to blame millworkers or management for the looming shutdown, said Scott Gonya, a town councilor who also works at the mill.

“When the mill opened back up in 2003, a good many employees gave up other jobs and came back because they knew what this place meant to the area,” Gonya said. “In the last four years, the men and management have done an excellent job keeping this going. We have really changed how we do business.

“I don’t think that there’s anything else we can do to change this situation,” he added. “The answer has to come from outside.”

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