Buyer’s offer includes cut in pay to Millinocket, East Millinocket paper mill workers

Steam rises from a stack at the East Millinocket paper mill early Wednesday afternoon, Feb. 16, 2011. Meriturn Partners, a San Francisco investment group, recently signed a tentative agreement to buy the Millinocket and East Millinocket paper mills.
Steam rises from a stack at the East Millinocket paper mill early Wednesday afternoon, Feb. 16, 2011. Meriturn Partners, a San Francisco investment group, recently signed a tentative agreement to buy the Millinocket and East Millinocket paper mills.
Posted March 05, 2011, at 10:02 p.m.
Last modified March 06, 2011, at 5:40 p.m.

Union workers at two Katahdin region paper mills would take a $2 per hour pay cut, lose vacation time and some seniority as part of a five-year contract initially proposed by Meriturn Partners, a San Francisco firm interested in buying the mills, officials said Saturday.

According to an initial bargaining agenda obtained by the Bangor Daily News, some starting positions at the East Millinocket and Millinocket mills would pay $11 per hour. Maine’s minimum hourly wage is $7.50.

Paper room wages would run $11 for a starting spare pool worker and $13 per hour for starting assistant clothing/chemical cleaner. Machine tenders would get $19.63 an hour, the highest-paid position, with most other jobs in the $14 to $17 per hour range. Machine tenders get $21.63 per hour now with lesser jobs paying between $16 and $19 per hour.

If the half-dozen unions at the mills accepted Meriturn partner Lee C. Hansen’s initial offer, as made last week, they would be solidifying their position as the lowest-paid paper mill workers in Maine, said Louis Ouellette, president of United Steelworkers Local 152, which serves East Millinocket mill workers.

“The hardest thing I ever did was give it to these men in here, this offer,” Ouellette said Saturday. “I did explain to them not to get alarmed. I told them, he [Hansen] is not saying, ‘This is written in stone, take it and vote on it.’ He is saying, ‘Take a look at it.’”

Hansen could not be reached for comment on Saturday.

When they first got word of Meriturn’s initial offer last week, union rank-and-file workers were not pleased. They already agreed to cut their salaries by about $2 per hour in 2003, when the former Great Northern Paper Co. was bought by a successor and the mills came out of bankruptcy. By comparison, machine tenders at the mills in Bucksport and Madawaska get about $10 per hour more than would Katahdin paper mill workers under the proposed contact, Ouellette said.

“Their reaction was not very good,” Ouellette said. “It was mad, confused, because we have given, and given and given to help keep this place going.”

“There are a lot of people saying no to this. There hasn’t been any positive feedback whatsoever on it,” said Ross Waite, vice president of Local 152.

Yet like East Millinocket and Millinocket town officials when Hansen made his initial offer seeking $48 million in property tax breaks over 10 years to restart the Millinocket mill and keep the East Millinocket plant operating, union presidents have not immediately vetoed Meriturn’s offer, Ouellette said.

“In this area we live in, there’s nowhere else I can make $19 or $20 an hour,” said Ouellette, who has worked in the region for 33 years. “I would have to move.”

Meriturn signed a letter of intent Feb. 11 to purchase the East Millinocket and Millinocket mills from Brookfield Asset Management of Toronto by April 29 if several conditions are met. East Millinocket and Millinocket town leaders disclosed Tuesday that Meriturn seeks the $48 million break over 10 years from both towns and would buy the mills — which Meriturn partner Lee C. Hansen said have lost money for years — for $1.

If the deal collapses, Brookfield said, it would shut down the East Millinocket plant April 22. That would leave about 450 workers unemployed. If the deal is made and the Millinocket mill is restarted, that mill would create about 200 more jobs.

State Rep. Herbert Clark, D-Millinocket, said he can see the pressure of the mills’ dire straits and the proposed pay cuts etched in workers’ faces.

“I am very surprised that something dramatic has not happened because they are under so much pressure,” Clark said Saturday. “It has been just hard on everybody.”

Clark will lead a contingent of East Millinocket and Millinocket town and school leaders Tuesday in a meeting with Gov. Paul LePage, where they will discuss Meriturn’s initial proposal and see what state government can do to aid the municipalities.

LePage’s spokesman, Dan Demeritt, said the state is prepared to help Meriturn secure a biomass boiler at the Millinocket mill to help wean it from its profit-killing dependence of burning oil to make steam as part of the papermaking process. Initial aid estimates run about $10 million for the boiler.

But state government will not help the towns with a local tax issue, Demeritt has said.

The state should help the towns, Clark said. A $48 million tax cut would force municipal and school layoffs, while rejecting Meriturn and not keeping the mills going would be even more devastating.

“Like his predecessor, he [LePage] is overwhelmed by what’s taken place,” Clark said. “He is doing what he can based on the limitations he and the state have. We [state government] don’t have two nickels to rub together either, but it won’t be long before people in these towns are going to have to put together several scenarios showing where people will be laid off.”

Ouellette said he hopes talks with Meriturn next week will go well.

“We will meet next week and find a happy medium and come up above what they have offered. We just can’t settle for what they threw at us. We plan on negotiating in good faith,” he said, “and I know they are ready to negotiate because they did not take this and say, ‘Take it or leave it.’ They did not do that.”

East Millinocket leaders will hold their first public hearing Monday on Meriturn Partners’ proposal to buy the Main Street paper mill and the deal’s possible impact on the town. The 6 p.m. hearing at Schenck High School will allow residents to get the latest news on the possible transaction — or at least as much as officials can say, with the talks just starting — and help their leaders find the best way forward, said Mark Scally, chairman of the Board of Selectmen.

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