Verso's proposed takeover of NewPage will not affect scheduled layoffs at NewPage's Rumford, Maine, paper mill due to indefinite shutdown of one coated paper machine starting in February, but new ownership could mean better future, says union leader
January 7, 2014
(Bangor Daily News)
– The president of the largest union at the NewPage paper mill in Rumford said that Verso Paper's announced acquisition of the mill will not stop the layoffs scheduled to go into effect in February.
Verso Paper announced on Monday morning that it had agreed to acquire NewPage Holdings Inc., which operates several paper mills around the country, including the one in Rumford that currently employs roughly 850 people. Verso currently operates paper mills in Bucksport and Jay.
NewPage in November announced it would "indefinitely" idle one of its paper machines at its Rumford Paper Co. mill because of falling demand for coated paper, which is used in magazines and catalogs, and competition from European mills. The plan was to stop the machine in February and lay off approximately 18 salaried employees and 110-120 hourly workers, according to Ron Hemingway, president of the Local 900 United Steelworkers union, which represents approximately 650 workers at the Rumford mill.
Hemingway told the Bangor Daily News on Monday that he received confirmation that Verso's acquisition, which is not expected to officially close until the second half of 2014, would not affect the expected layoffs.
"Right now the plan to shut down the No. 12 machine is going forward even with this announcement," Hemingway said.
Hemingway estimates the mill would employ closer to 700 people after the February layoffs take effect.
Hemingway said he was hopeful that Monday's news of the impending acquisition would benefit the Rumford mill, but he knows acquisitions usually brings change for those being acquired.
"Right now all we can have is a lot of hope," he said. "We hope Verso will open up some markets for us and things could get better, although we realize when one company buys another usually it's the one getting bought that suffers the most damage or cutbacks."
Hemingway said NewPage's strategy in the face of falling demand and increasing competition has been to idle machines or shut mills -- the company has shut down or spun off four paper mills, though none in Maine, in the last eight years. He hopes Verso will take a different approach.
"So far, NewPage's plan has been to shut down machines. I don't see where they're being aggressive to take more of the market," Hemingway said. "I'm just hoping Verso has a better plan. Maybe they'll try to add some different type of orders and keep the machines running instead of staying in the narrow coated paper market, which has already been determined to be shrinking. We'd like to see some new product development. As far as the workers in the mill, we'd like to see them put some things on these machines that are profitable."
The existing union contracts at the NewPage mill contain a "successor clause" that says that if NewPage sells the mill, the purchasers have to honor the existing contracts.
"Our [Human Resources] manager told us this morning that Verso fully intends to recognize the contract and the successor clause," Hemingway said. "Even though they have the nonunion mill just down the road [in Jay], they also have a unionized paper mill [in Bucksport]. They're used to union contracts. I don't think it's a big deal."
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