Katahdin mill to shut down Sept. 2

Posted Aug. 26, 2008, at 12:47 p.m.
Last modified Jan. 29, 2011, at 7:25 a.m.

MILLINOCKET — In a move long dreaded for its devastating impact upon the Katahdin region’s fragile economy, the Katahdin Paper Co. LLC mill will be shutting down indefinitely on or about Sept. 2, mill officials said Tuesday.

Starting Tuesday morning, the mill’s approximately 208 workers were being told by their union presidents and their management supervisors of the shutdown, said Glenn Saucier, the mill’s personnel department director and the mill’s spokesman.

“We don’t have the orders,” Saucier said. “We will keep it going to fulfill our present orders and we will shut it down. This is an indefinite shutdown. We continue to talk with potential biomass developers and we hope that in the near future that things will work out for that.”

Mill management and the mill’s owner, Brookfield Asset Management of Toronto, had been working with state officials to find a biomass-powered energy source since management announced on May 29 their plans to indefinitely close the mill. Management blamed the shutdown on the runaway cost of oil, which is the mill’s primary energy provider.

Town Councilor Scott Gonya, a senior tech in quality assurance at the Katahdin Avenue mill, disputed that the mill’s lack of a replacement for oil, or a lack of sales orders for catalog, magazine and retail industry fliers, prompted the shut-down.

“They are simply closing us because they want to sell power and make more money,” Gonya said Tuesday. “They don’t care about our community. They only care about our stockholders making money.”

The mill’s owners have stopped taking orders from customers so that the company can sell electricity, of which the mill generates about 22 mega-watts to help power its machinery, Gonya said.

Gonya claimed that in earnings before interest and amortization, the mill made $973,000 in June; $1.2 million in July; and so far in August had made $800,000.

“We can get orders. They just won’t take ‘em,” Gonya said. “There’s no justification for closing this mill at this time.”

Saucier could not confirm or deny Gonya’s statements.

“Maybe Scott knows something that I don’t know. I don’t know that,” he said of Gonya’s claims.

It wasn’t immediately clear Tuesday exactly how many workers would be laid off, but previous scenarios have set the layoffs at 208 workers. Some workers have left the company since May 29, and some workers at Katahdin Paper’s East Millinocket mill, which will remain in operation, will likely lose their jobs due to a management restructuring and “bumping.” With that, some senior Millinocket union workers would replace less senior workers in East Millinocket.

The mills combined employ about 625 workers, Saucier said.

The mill shutdown would devastate the already fragile and depressed Katahdin region economy. The Katahdin Paper Co. LLC mills effectively make Katahdin Paper, a subsidiary of Brookfield, the region’s largest employer.

Dan Cashman, an assistant press secretary with Gov. John Baldacci’s office, said just prior to Saucier’s 1 p.m. statements that the governor’s staff had heard of the shutdown but not yet confirmed it with the mill.

Katahdin and its parent company will continue to work with several energy developers who have expressed interest in financing a new energy source, continue the worker layoff process and prepare the mill for an eventual restart, Saucier said.

He did not know when or whether the restart would occur.

Similar articles:

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business