May 30, 2020
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Madawaska’s future hinges on mill dispute

MADAWASKA, Maine — Jeff Albert loves diversifying his own economy. The owner of 23 18-wheel trucks, a freight brokerage and a perfume bottling factory, he is among the town’s top 10 taxpayers, employs 60 workers and is always looking for new ventures to get into, he says proudly.

But ask Albert to describe what would happen to his livelihood, his town and the St. John Valley if the Fraser Papers Inc. mill closes, and he uses the word town officials, residents and other businesspeople use: Disaster.

“Although they [Fraser] contribute directly to 40 percent of our sales, indirectly they affect 80 percent,” Albert said Friday. “If they close, about 75 percent of my business is gone. There would just be shells of the companies left.”

Town leaders would have to slash government education services to replace the millions in taxes Fraser, the town’s top taxpayer, pays annually, said Selectman Ivan “Skip” Fletcher, owner of Jake’s II Cleaning Service.

“There would be a trickle-down effect that would devastate everything,” Fletcher said.

Sam Sirois, co-owner of Crystal Lynn’s Restaurant, estimates that about 75 percent of the businesses and residents in this small community of 4,500 residents, New England’s northernmost town, would be devastated by a closure.

“There would just be a handful of restaurants left in this town,” Sirois said. “More than half would be gone. The question is whether we would be among them.”

Sirois might have to answer that question soon.

Fraser officials say the 680-worker paper mill, and its sister mill across the Canadian border in Edmundston, New Brunswick, would be closed and scrapped unless the 460 members of United Steelworkers Locals 365, 291 and 1247 help Fraser escape bankruptcy by accepting a proposed three-year contract renewal, which they say includes $4 million in concessions.

The Canadian operation supplies the mill with pulp and energy for papermaking.

Union leaders ended contract talks on Thursday by agreeing to pass along to membership the offer, which they declined to endorse or reject, in a meeting today. A vote is set for Monday. Negotiated intermittently since August, the contract was rejected by 98 percent and 85 percent of members in votes held on Nov. 22 and Jan. 30, union officials said.

Management and the unions both have sad stories. Management says the new deal is among conditions the re-formed, postbankruptcy Fraser company, temporarily called Newco, must meet to prevent closing the specialty papers mill.

A credit group of Fraser owner Brookfield Asset Management of Toronto, CIT-Canada and the New Brunswick provincial government won’t proceed with a proposed $180 million bailout of Fraser without the contract. Fraser sought bankruptcy protection in Canadian and U.S. courts in June.

Workers complain that the new contract is a disgrace. Fraser filed for bankruptcy protection while its leaders were taking hundreds of thousands of dollars in bonuses. Money better spent on the mill or its workers is lining executive pockets, they say.

Union leaders also were outraged that management’s primary negotiator went public with threats to close the mill if union members didn’t OK the contract. Among other things, news media accounts generated from the negotiator’s comments lacked insight into day-to-day mill operations, previous union contracts, the many sac-rifices already made by unions to keep the mill going, as well as any comparison between union deals and the compensation paid to management and salaried workers, union members said.

Fraser officials acknowledged that some executives received large bonuses, but said the $4 million in concessions comes with a restructuring plan that cuts another $7.5 million in salaried positions in Toronto.

Between the union membership and the company are town residents and business owners, many of whom find publicly discussing the contract negotiations difficult for fear of retribution from either side.

“We’re caught in the middle,” said Don Michaud, manager of Dragon Products Co., which employs about 10 people making ready-mixed concrete in Madawaska and Presque Isle. “As a businessperson in this community, you can’t be putting your neck in the wringer by talking about it. The community is just too small.”

“You don’t want to alienate the union people or management,” Sirois said. “Businesses want to be successful in town. You can’t take positions on this.”

A source of identity, pride

The mill is more than the town’s largest employer, said Joan Chasse of Frenchville, a part-time employee at Daigle Furniture and Appliance of Main Street. It’s a source of town and regional identity and deep generational pride. The economy, culture and history of the region, which includes Madawaska, Grand Isle, Frenchville, St. Agatha and Sinclair, are built around it.

“My father worked for the company and my brother works for it now,” Chasse said. “Everybody here knows or is related to somebody who works there.”

As the town’s top taxpayer, the mill paid $4.3 million and $3.8 million in taxes to Madawaska over the last two years, said Lisa Parent, town tax collector and deputy treasurer. The town’s next-highest taxpayer, Valley Realty, which operates High View Manor, a senior citizens home, pays $32,000 annually.

Ridgewood Estates and Sears Roebuck, which operates the town Kmart, pay less than $25,000 annually to the town, she said.

Whole town departments might face elimination if the mill closes, said Fletcher and Mike Violette, chairman of the Board of Selectmen, a millworker and USW union member.

The mill’s economic power goes beyond its consumption of raw materials, its production of coated and uncoated freesheet and of hybrid and uncoated groundwood papers, and the money it pays its employees.

“People who never even heard of Fraser will be affected if the mill closes,” said John Michaud, a trucking broker at Evergreen Trading LLC, one of Albert’s companies.

Through Evergreen and other trucking companies, the mill ships out hundreds of trucks every week carrying mill paper across the Northeast. Those trucks bring back food, clothing, shoes, housing supplies, doors, clocks — almost anything sold or used by people here. Lose the trucks and the businesses that use them will face a shipping vacuum, Michaud said.

“If they can’t leave here carrying something, they can’t come back with the other things,” Albert said.

The lack of a stable mill operation, Albert said, makes it difficult for businesses to plan. If the contract is approved and Fraser emerges from bankruptcy intact with him as one of its haulers, he probably will spend about $850,000 in six months replacing five worn-out trucks and 10 trailers.

“I’ve been waiting a year for something to happen. It would be nice to move forward,” Albert said. “You can’t do a gosh-darn thing until you know what’s going on.”

Fletcher predicted that a population exodus, similar to what happened in Millinocket and other Maine towns when mills closed, would occur if the mill closes. Real estate sales would plummet along with real estate values — this in a market already hurting.

Given what’s at stake, Fletcher is incredulous that union members haven’t approved the contract.

“If I were a union member, I would vote for this contract. A little money is better than no money at all,” Fletcher said. “I really think that they think that this [Fraser’s demand for a contract ratification] is a ploy to make them make concessions, but this is in bankruptcy court. It’s hard to think of that as a ploy.”

Fletcher said he believes that most residents agree with him.

Yet townspeople have no right to tell union members how to vote, said Sirois, a retired millworker.

“If you’re voting on the contract, you’re voting as a union member. The people in town really don’t have anything to say,” he said. “It’s not their contract.”

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