EAST MILLINOCKET, Maine — Routine maintenance and a lack of orders will force the Katahdin Paper Co. LLC mill to shut down for most of April, furloughing as much as three-quarters of the mill’s 491 employees, officials said Wednesday.
Only the maintenance staff, about a quarter of the work force, will remain on the job, said Bill Peterson, director of human resources for Fraser Papers, the company that Brookfield Asset Management pays to manage its mills in East Millinocket and Millinocket.
The furlough will start April 9 and is tentatively set to end May 4, depending on the boiler maintenance work and whether more paper orders come in before the end of the month, Peterson said.
“Right now we know we have orders to meet in May,” Peterson said Wednesday. “If we get additional orders before May, then we will have to evaluate them when they come in and make our decisions accordingly.”
With its sister mill in Millinocket temporarily idled since September as Fraser and Brookfield officials look to change the Millinocket mill’s steam generation power from oil to biomass, the East Millinocket mill’s furloughs threatened the Katahdin Paper Co.’s status as the Katahdin region’s largest employer.
Management briefed union presidents of the intended shutdown during a meeting on Wednesday afternoon, said John Lee, president of International Association of Machinists Local 362. Lee was hopeful that the furlough would lead to an extended and steady period of work.
“As of today we started making paper for May and that wasn’t really good. Once we start back up we will be in good shape,” Lee said Wednesday. “There are plenty of good orders. It’s just that this time of the year has always been slow.
“It’s never good for the economy to have this,” Lee added. “Everybody knows the work isn’t here right now, but all of the paper industry is taking the same beating.”
The Katahdin mills typically cease production for seven to 10 days every year, usually in April — the slow season for the paper industry — to service their biomass boilers and other equipment, paying maintenance workers overtime to work around the clock to bring the boilers back online, Peterson said.
But with the lack of orders, Fraser’s new policy of making paper only with orders in hand to increase cash flow, and the dormant national economy, it is smarter to shut down and have the maintenance done without any overtime, Peterson said.
“It doesn’t make sense to rush this and pay premium costs,” he said.
The company had shut down the No. 5 paper machine on Feb. 9 idling about 140 hourly workers for a month before calling them back on March 9. That furlough was implemented as part of efforts to build cash flow by running paper machines only with orders in hand. The No. 5 makes newsprint and telephone directory stock.
“You have one good week, and you start to get your spirits up, and then you have a week that’s dismal. Every day is a struggle,” Peterson said.
Peterson confirmed Wednesday that the only good news to come workers’ way since the economy flat-lined is that the paperworkers union members at the two Katahdin mills will get an automatic 2½ percent pay hike effective May 1 per their collective bargaining agreement.
“In this economy it’s very difficult to do but it’s something that was bargained into the agreement years ago,” he said.