Governor to hear mill plans Decision on restart to be made by Oct. 8

AUGUSTA – Multibillion-dollar conglomerate Brookfield Asset Management will tell Gov. John Baldacci on Oct. 8 whether it will restart Millinocket’s $150 million paper mill in 2009, he said Friday.

Officials from the mill’s parent company briefed Baldacci on Thursday. He met behind closed doors on Friday with union representatives who had said they were fed up with the company’s lack of commitment to the mill, which is among the Katahdin region’s largest employers.

On Friday, union officials were assuaged, somewhat.

“There was reassurance and that reassurance certainly felt good,” said Duane Lugdon, an international representative for three United Steelworker unions at the Millinocket and East Millinocket mills owned by Katahdin Paper Co. LLC, a Brookfield subsidiary.

“What we have been looking for here is Brookfield to commit to us, and until today we haven’t felt that,” Lugdon said. “At least today we feel that there’s potential for them to rebuild this power platform here.”

Workers also were concerned that the country’s financial crisis would upend, or at least delay, Brookfield Asset’s efforts, said David Lowell, an international representative with the International Association of Machinists and Aerospace Workers.

“They are still asking people to invest in their program for Millinocket,” Lowell said of Brookfield Asset Management, “and what’s going on today on Wall Street is pretty scary.”

On May 29, Brookfield announced plans to shut down the mill indefinitely on July 28, cutting 208 jobs, because of runaway oil prices. The mill used more than 400,000 gallons of oil to make steam in 2007. The date of closure was delayed repeatedly before the Sept. 2 shutdown.

Officials at Katahdin Paper agreed on June 13 after meeting with U.S. Sens. Susan Collins and Olympia Snowe that they would open the mill in 2009 with a biomass boiler rebuilt from a mill oil burner – if the numbers added up.

Millworkers have been mothballing and winterizing the mill since Sept. 2. As of Friday, close to 30 workers were laid off in accordance with what Katahdin management said would be a gradual layoff process.

Since June, Brookfield and an unidentified biomass provider have been in negotiations, but Brookfield, Baldacci and the unions haven’t commented on precisely what is being negotiated or why it’s taking so long. Workers fear that the mill will never reopen.

But Baldacci said he told the unions that state officials have briefed Brookfield on the advantages of renewable energy credits and set up meetings for Brookfield with state rail companies to help them deal with a myriad of tangential issues that will help make the mill more profitable if it restarts.

With successful biomass negotiations, Baldacci said, Brookfield will have in the mill many basic requirements for profitability: a highly skilled work force earning among the lowest wages for paper workers in Maine, a state-of-the-art paper machine worth about $150 million, a ready supply of electricity, and customers dedicated to the high quality of the mill’s products.

“I don’t want to go through this exercise unless restarting the mill is something that really makes sense,” Baldacci said. “You have to remember that this is a company that took the mill from bankruptcy, put millions into it and needs this mill to be profitable, and when this mill does reopen it will pay better than average wages.”

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