May 22, 2018
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Katahdin paper unions to discuss Cate Street offer

By Nick Sambides Jr., BDN Staff

EAST MILLINOCKET, Maine — Unions representing more than 400 workers will meet Wednesday to vote on a contract offer from a New Hampshire-based investor seeking to buy the two Katahdin region paper mills, a union official said Friday.

United Steelworkers Locals 152 and 37 and the Katahdin Trades Council announced Friday the conclusion of negotiations with Cate Street Capital of Portsmouth. They would not reveal the offer’s terms.

A statement issued by Duane Lugdon, a USW international representative, said the unions “believe that the offer resulting from the negotiations is one which provides their respective members with wages, benefits and other conditions of employment that are, for the most part, customary to the paper industry.”

The members might see no choice. The April shutdown of the East Millinocket mill forced the layoff of as many as 450 workers and contributed to the region’s 21.1 unemployment rate. The Millinocket mill closed in September 2008, idling about 150 workers.

“This offer and its approval is a condition of the sale. Without a contract in place with the employees, there will be no sale,” Lugdon said Friday.

Richard Cyr, a senior vice president of Cate Street Capital and possible chief executive officer of the new Great Northern Paper Co., stressed that all conditions of the agreement Cate Street signed with mills owner Brookfield Asset Management on Aug. 30 must be met by Sept. 15 or the deal would die.

“There were probably six significant hurdles to overcome,” Cyr said. “We believe that the remaining four or five are in process and that we are making good progress. Our confidence is high that we will close on the 15th and that all the conditions will be met.”

A private equity firm that has raised more than $6 billion to finance more than 40 projects, Cate Street specializes in renewable energy and green technology projects, according to its website, Friday’s union announcement ends a week in which Cate Street got another significant boost: the securing of financing to cover almost all construction costs for a $275 million biomass boiler in Berlin, N.H.

Wednesday’s meeting at Schenck High School’s gymnasium will start at 7 p.m. All members of USW locals and the trades council, which includes local units of the International Association of Machinists, International Brotherhood of Electrical Workers, Service Employees International Union and the Office and Professional Employees International Union, should expect a contract vote, Lugdon said.

East Millinocket and Millinocket leaders hope to have TIF and property tax agreements resolved next week. Other conditions include the transfers of water rights, environmental permits, and ownership of the Dolby landfill to the state.

The Sept. 15 deadline, a specific date never before disclosed publicly, was set by a tight manufacturing schedule. The new Great Northern Paper Co. will have six weeks beyond Sept. 15 to hire its workers, restart the mill and get product out the door, Cyr said.

“I think it is important that people know this,” Cyr said. “We need to start communicating to our potential workers that there is a window here that we all need to hit, and hope that when we bring the new workers on, they are as motivated as we are to make this happen.”

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