September 21, 2024
Business

Lincoln mill pact requires union OK Prospective buyer says vote critical

BANGOR – Starting today, the union at abandoned Lincoln Pulp and Paper Co. will consider whether to accept a six-year contract from the facility’s prospective buyer, First Paper Holding Corp. LLC of Connecticut.

Contract approval is vital to First Paper Holding proceeding with its purchase of Lincoln’s parent company, Eastern Pulp and Paper Corp., according to John Wissmann, a First Paper Holding partner.

“If they don’t accept it, then things could be over,” Wissmann said Sunday. “This is a difficult deal to put together. All of the parts have to fit. Without labor, it makes no sense for us to own the mill.”

The prospective buyers plan to change the name of the Lincoln facility to Lincoln Tissue and Paper Co.

The contract, which will be presented by union leadership during a noon meeting Monday at the Knights of Columbus Hall in Lincoln, shows at least 45 fewer union members than were employed by Eastern Pulp.

About 300 union members will operate the machines and the pulping plant. The No. 7 tissue machine will be the first paper machine restarted, and the pulping operation should go on line in late June, according to Steve Corriveau, president of PACE No. 1-0396.

The contract includes a 10-percent pay increase over a six-year period, a restoration of five weeks of vacation time by January 2006, and pension and health care benefits, Corriveau said.

Union members will review the contract overnight tonight and then vote from 6 a.m. to 7 p.m. Tuesday at the union hall on whether to accept it.

“Some of these cuts he’s making are very challenging,” said Corriveau, about the plans for the mill that were described to him by Keith Van Scotter, one of the partners in First Paper Holding. “I can’t see how he can do that, but he says he can.”

But Corriveau said he’s satisfied with the contract.

“I’m happy that the mill is coming up,” he said. “It’s going to be tough, but it’s better than the alternative.”

Bankrupt Eastern Pulp’s mills and its Amherst, Mass., headquarters employed 750 people before they were shut down on Jan. 16 and subsequently ordered abandoned by a federal bankruptcy judge on March 12.

Union approval of the contract is just one part the deal. First Paper Holding still is negotiating with lenders and creditors on an asset purchase agreement that will spell out the future for not only Lincoln but its sister mill, Eastern Fine Paper Co. in Brewer.

Terms of the widely anticipated asset purchase agreement have been expressed verbally to only a handful of people who won’t comment on it.

The agreement will be up for consideration during a U.S. Bankruptcy Court hearing Wednesday afternoon in Portland, where First Paper faces a long shot trying to convince U.S. Bankruptcy Chief Judge James B. Haines Jr. to reconsider his abandonment order and permit a sale.

The Brewer mill will not be reopened anytime soon, and First Paper Holding and the mill’s union have not had any contract negotiations.

Jack Cashman, commissioner of the Maine Department of Economic and Community Development, said Sunday that the Brewer mill is included in the sales terms, but that “the principal buyers are more interested in Lincoln.”

On Friday, Cashman met with Drew Sachs, economic development manager for the city of Brewer, to discuss what would be required to reopen the Brewer mill and to talk about alternatives for the massive Penobscot River site.

“We’re looking at different ways to increase the odds that Brewer might reopen,” said Sachs, who would not reveal any specifics.

Since March 12, the state has maintained the properties under police powers exercised by Gov. John Baldacci by paying for a skeleton crew, heat and electricity and other expenses to prevent a possible environmental disaster that could have occurred if chemicals at the facilities were unattended and exposed to weather. The Brewer mill officially was mothballed a week ago.

On Wednesday, the state Department of Environmental Protection plans to turn off the heat at the Lincoln mill, citing warm weather and a need to limit expenses. The DEP had a budget of $1.425 million from emergency funds and bond money to cover costs and that money is running out.

“The risk has subsided with the warm weather,” Lee Umphrey, the governor’s spokesman, said Sunday. “This will be a way to stretch out remaining resources. It should have no impact on the sale.”


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