OLD TOWN – The unions representing about 250 International Paper workers who will lose their jobs in April are accusing the company of breaking state law and violating existing contracts.

This week, the unions and the company are hammering out a severance agreement for workers at IP’s Passadumkeag and Costigan sawmills. Last week, the company announced it will close the mills in April, maintaining only a small chipping operation employing about a dozen workers at the Costigan facility. Officials met on Monday and are expected to resume talks this week. Union officials plan to meet with Gov. Angus King on Thursday.

During a press conference Tuesday, union officials said the company’s initial offer not only breaks state law, it takes benefits away from workers.

“This is a company that wants workers to make concessions in current working conditions during the last days of their employment,” said Duane Lugdon, an international representative of the Paper, Allied Chemical and Energy Workers International Union, known as PACE.

The union leader said IP’s proposal makes the severance package conditional, available only as long as employees agree not to file grievances or unfair labor charges against the company. “It is deplorable,” charged Lugdon. He said the company is not bargaining in good faith and he is filing a complaint with the National Labor Relations Board.

The PACE official said IP is breaking the law by proposing that workers’ severance payments be based on 40 hours of pay for each year of service. He said state law has a different definition of a week’s pay.

State law defines a week’s pay as an amount equal to one fifty-second of an employee’s gross wages paid during the previous 12 months before termination, according to Royal Bouchard, the chief labor and safety inspector for the Department of Labor.

David Lowell of the International Association of Machinists and Aerospace Workers, which represents the workers at the Costigan mill, stopped short of saying his organization would file charges, but agreed with Lugdon’s assessment of the situation at the press conference.

“We intend to make them adhere to state law,” said Lowell. “IP has run ads throughout the state that say what good neighbors they are and that Maine is where they want to be. But they are not being fair to the towns where these two mills are located, the residents who live there or the workers. They’re not doing anything for this state but taking away good-paying jobs that this area of the state can ill afford to lose.”

Lowell said the workers who will remain at the Costigan facility would be covered by the current contract until January 2002. He anticipated that negotiations to cover those dozen workers would begin late this year.

The wrangling between IP and the unions and the posturing of politicians from Washington, D.C., to Augusta were of little comfort to John Shorey, 41, of Lowell. He has spent his entire adult working life – 23 years – at the Passadumkeag mill.

“We’ve all been quite devastated by the news,” said Shorey at the press conference. “We expected a layoff of a month or two. That’s normal for this time of year. But to walk into that meeting [last week] and be told that we had no future at all there – it’s just devastating.”

Shorey said he is one of more than 50 people who have been employed at the Passadumkeag facility for more than 20 years.

Terry Gooding, an IP spokesman, said the company had no intention of violating the law or the labor contracts. “We are going to do the best we can by employees. We fully recognize the impact this is having on employees,” said the IP official.

IP’s severance proposal includes: terminating dental coverage at the end of April; extending hospital, surgical and medical coverage through May; extending life insurance through May; extending the employee assistance program for up to three months after the mill is closed; terminating the health and fitness assistance program, employees’ quarterly safety incentive program, and the safety shoe and safety glasses reimbursements retroactive to Feb. 8.

Lugdon said several firms have expressed an interest in purchasing and operating the mills, but International Paper refuses to sell them. “They [IP] are afraid any new owner will compete with them in the future,” said Lugdon. The PACE union official declined to name the companies interested in purchasing the sawmills. “These companies are reluctant to antagonize IP,” he said.

As for whether IP would sell its Maine mills, Gooding said he could never say never, but the company had no plans to sell them or restart the mills. “Our position is because of the age of the facilities, they wouldn’t go for very much in the market,” he said, referring to the 27-year-old mills. “We obviously would not want to sell to a company we are going to compete with,” he said.

Gooding said a bigger reason the company does not want to sell is an overcapacity in the industry. “What we have been trying to do and the industry over all has been trying to do is reduce capacity,” he said. The IP spokesman said the oversupply was driving prices down and that by eliminating capacity, prices would improve.

The IP official said the company decided to close the two Maine sawmills because they were losing money as the result of low lumber prices. He said lumber prices in late December and early January were the lowest they had been in about 10 years. Less demand along with imports also drove prices down. Also, he said it would not be cost-effective to invest in refurbishing the Passadumkeag and Costigan facilities.

Gooding said the two Maine lumber mills are not the only ones IP had closed. In recent months the company closed two of its mills in Georgia.

A meeting between workers and representatives of the State Department of Labor to discuss retraining programs for displaced workers will be held at 4 p.m. Thursday at the Helen S. Dunn School on Military Road in Greenbush.