Approximately 150 workers are affected by the decision of Domtar Corporation to permanently close down its paper machine and supporting sheeter in Baileyville. The company is continuing to operate its pulp mill, which employs 300 workers.

     The Canadian company also permanently closed its mill in Gatineau, Quebec, as well as its converting center in Ottawa and a paper machine at its Port Edwards, Wisconsin, mill. "[This] is an important step in our review of overall production capacity," said Raymond Royer, Domtar's president and chief executive officer, in a release. "The driving forces behind this decision to permanently close these operations are excess capacity and cost competitiveness. While we are in the process of leveraging our improved geographic footprint to serve our customers from our best performing operations, adjusting our production to demand remains an outgoing exercise. Further rationalization may be implemented in the near future."

     "We look at the North American market for uncoated free-sheet paper since 1990 and it's contracted 20 percent," says Scott Beal, spokesman for Domtar's Woodland mill. "There used to be 15 million tons annual consumption of our product, but now it's in the range of 12 million. The result has led to a situation of excess production capacity to the demand."

     "For years there has been a lot of talk about the paperless office," continues Beal. "That's beginning to get a foothold and contributing to the decrease in the demand for our product. Also, postal rates have risen. And a little bit of paper comes in from offshore."

     The Woodland paper machine, which was built in 1958 as a newsprint machine and converted twice since then, has a yearly production capacity of 125,000 tons of uncoated paper. Beal says today's larger paper machines can produce about 1,000 tons a day compared to the Woodland machine's 360 tons daily.

     According to Beal, Ghislain Dinel, Domtar's senior vice president of its northern region mills, first told Woodland mill general management the bad news on Tuesday morning, July 31, before calling the laid-off workers to a 10:30 a.m. meeting. "We had a very good turnout. There was an opportunity for people to speak," reports Beal. "The folks were disappointed, but I can't say they were shocked."

     Baileyville Town Manager Scott Harriman agrees that the Domtar announcement was not a big surprise to laid-off workers, but that doesn't lessen the shock. "The people I've talked to are disappointed and upset. Obviously, we're concerned for the workers and their families," he stresses. "It's an entire Washington County issue. A Charlotte County issue, as well. We're trying to utilize all the resources we have."

     With the closing of the paper mill, the arrival of the new business ICS of Maine is even more important to the area. The company plans to hire 65 to 70 people and aims to eventually employ 150. "We're hoping to break ground this month and get some of these people back to work."

     Harriman adds, "We're just waiting for the Trade Adjustment Assistance to be approved."

Workers' thoughts
     One of Domtar's laid-off employees is 50-year-old Larry Severance of Calais, who has worked as a wrapper operator at the paper mill for the past seven years, after working for 25 years at the stud mill in Woodland. "It's quite devastating," he says of the paper mill's closure. "But I think a lot of workers knew it was coming and that it was just a matter of time, because we've been periodically laid off."

     "GP could absorb more costs than Domtar. It's a bigger company," says Severance, referring to the Woodland paper and pulp facility's former owner, Georgia-Pacific. "Plus, I don't think we fit into Domtar's plans."

     Although Severance's two children are grown and his wife Linda is employed, the economic loss to his family will still be great. "The average wage for paper mill workers was $55,000, and a lot of them worked overtime, which is considerably more," he reports.

     Severance points out that if the laid-off paper mill workers could get jobs at the planned Baileyville business, ICS of Maine, they would be earning about one-third less than they did at Domtar. "They say the pay scale at the insulated panel plant runs from $22,000 to $60,000, and I'm guessing it's upper management who gets the $60,000."

     In addition to his salary, Severance and the other former Domtar workers have lost their health, dental and life insurance. "I can get it through my wife's business, but it's going to cost quite a bit of money to get it."

     He notes that the closure of the paper mill will affect more than just the laid-off Domtar employees. "It will trickle down as time goes on. People will spend less and less. Grocery stores and other businesses will feel it." And, although there are still about 300 people working for Domtar in the pulp mill, Severance is not optimistic about the longevity of those jobs. "I don't see it running for a long time. When the pulp price goes down, they won't want to keep it open."

     "The pulp industry will be leaving here. They'll just run the pulp mill when the market is good," agrees Denny Doten of Baring, another former paper mill employee who is not a fan of Domtar. "The OSB plant is still there, but they won't run it or sell it."

     A year and a half ago, Doten fell backwards into a hole at work, breaking his tailbone and fracturing some discs, so he had not been back to work since that accident nor had he anticipated a return. However, he stresses, "It's very disappointing to know there's no job for me after working there for 36 years."

     Wayne Claridge of Calais, who will turn 65 in September, has been employed at the Woodland paper mill for 46 years. After high school and a year of business college, he began working there in 1961. "I've put in for a job opening at the pulp dryer, and I'm the most senior person in the mill, so it's pretty much guaranteed that I'll get it," he reports. "I only have 10 months to go before retirement. I want 100 percent of my social security, and I'll still have my insurance with this other job."

     So, although he and his wife Sue are raising their 12-year-old granddaughter, Claridge knows they are luckier than the majority of the laid-off Domtar workers. "We're better off than most. Our house is paid for. I bought a new car the same day I got laid off. You can't stop living."

     "This is hard on the area -- one hundred and fifty people losing their jobs, and there's not that many jobs around that pay a half-decent wage."

Government help
     U.S. Senators Olympia Snowe and Susan Collins say they are currently working with the U.S. Department of Labor to ensure that Domtar's petition for Trade Adjustment Assistance (TAA) will be quickly reviewed. "This is unfortunate news for Washington County and the many employees who are to be adversely impacted by this shutdown," said Snowe and Collins in a joint statement. "We will do everything in our power to ensure that these employees get the critical assistance they need to stay on their feet while continuing to support the existing Domtar workers."
     
      The purpose of the TAA program is to aid workers who lose their jobs or whose hours of work and wages decrease as a result of increased imports. If the TAA petition is approved, displaced Domtar workers will be eligible for employment training in another job or career, income support, job search allowance, and relocation services for individuals who obtain jobs outside of their normal commuting area. In addition, Senators Snowe and Collins are working with the State of Maine Department of Labor to expedite a request for a national emergency grant that will allow Maine to better assist the affected workers.

     Maine's Department of Economic and Community Development Commissioner John Richardson states: "Our top priority is ensuring the people displaced by this shutdown are given every opportunity to succeed and sustain their way of life. These incredibly loyal workers are highly skilled and trained, and would be an asset to any employer in the region."

     Richardson adds that Maine's paper industry is in transition and, unfortunately, that transition is a long and sometimes painful process. "Pulp and paper manufacturing continues to be profitable to many companies because of the state's skilled work force and access to natural resources, but in order to stay competitive in a global marketplace, they must continue to make new investments and become more efficient. We are committed to ensuring the pulp and paper manufacturers are supported in their future investments in Maine ooperations. We are optimistic that these investments can ultimately lead to a reversal in the existing trends."

     The Department of Economic and Community Development will be working with local official and other state agencies in the coming weeks to assist the community in replacing the lost jobs and making certain that the displaced workers get the help they need.

     Maine Governor John Baldacci, who met with the laid-off workers on August 3 in Calais, said that he was disappointed by Domtar's decision, "but in our meetings with Domtar CEO Raymond Royer, it has been clear that this is a mill in transition and not a mill in decline. My administration will do everything possible to help the affected workers and the community to move forward during this challenging period."

     "Domtar senior officials have assured me that the pulp operation at the mill will be maintained and could see new investment in the future," the governor said. "I have also talked to the company about the research that is taking place at the University of Maine and new technologies that can be employed at the mill. The technologies that are being developed can make it possible to produce ethanol during pulp production. The process holds great promise to make Maine pulp operations more profitable while also creating an alternative source of food. Coupled with Maine's forest certification program, which helps forest product companies successfully appeal to customers who demand environmentally sensitive business practices, the ethanol process can make our state's mills more competitive in the future. Sustainable forest management is the hook that gives Maine companies an advantage in the global marketplace, and we need to work to expand participation and increase the number of acres covered."

     U.S. Senator Olympia Snowe was in Baileyville on Tuesday, August 7, to meet with Domtar management, town officials and union representatives and to discuss the best way to move forward and ensure that the impacted workers, the Baileyville community and the state's paper industry remain economically stable in the coming months. When she spoke to the CEO of Domtar the previous day, Snowe vowed "hand-in-glove teamwork" with the congressional delegation, in conjunction with the governor, to "assist the very highly productive and skillful workers who have lost their jobs in Washington County and also ensure a strong, robust and viable pulp operation going forward into the future."

     U.S. Rep. Michael Michaud, in a statement released on July 31, says "I am deeply concerned to learn that Domtar Corporation plans to shut down the paper machine at the Woodland plant in Baileyville. This is devastating news for approximately 150 workers and their families. My office will work with local officials of the state, town and Maine Department of Labor Rapid Response Team to provide relief for these workers. I know that the days ahead for these workers will be hard. I want everyone to know in Baileyville and area communities that I will be there for them and my office will provide assistance in any way we can."

     Washington County Senator Kevin Raye of Perry expressed deep disappointment upon learning from company officials that Domtar was permanently closing the paper machine at the Woodland mill, and immediately called Maine's governor and two U.S. senators to request their assistance. "This closure will have a profound impact on the affected workers and their families and is a serious blow to Washington County's economy. It is crucial that every resource be brought to bear in response to Domtar's announcement, as we have seen with similar closures elsewhere in Maine," says Raye.

     He added, "I told the governor's office that I stand ready to work with him in any way possible to assist the workers and to do all we can to help Domtar secure the future of its pulp operation and the 300 people still employed there. I am pleased that the governor has met with Domtar CEO Raymond Royer. It is crucial that we leave no stone unturned in making sure that we as a state send a clear and unmistakable signal to Domtar that we value their presence in Maine and that we do everything we can to encourage them to invest in the future of the mill."

     Raye has also spoken with Baileyville Town Manager Scott Harriman and mill officials to offer his assistance to the town and workers. "I will be monitoring the process closely and stand ready to do anything I can to assist all those affected by the closure."

Port of Eastport
     Domtar ships out wood pulp through the Port of Eastport and is the port's biggest customer. Chris Gardner, Eastport port director, says the Domtar situation is "extremely unfortunate, but people know there was a real possibility this was going to take place."
"It will have no immediate effect on the port and doesn't affect normal operations," he points out, noting that the port is only shipping product from Domtar's pulp mill. "But the port is sensitive to Domtar's overall situation."

Looking down the road
     "As a whole, the paper industry in the State of Maine is fairly competitive," reports Michael Bilodeau, director of the process development center in the University of Maine's chemical and biological engineering department. He agrees with Domtar officials who say the pulp mill in Baileyville has a bright future. "It's in pretty good shape and hasn't diminished in value. High quality pulp is in demand. The facility is also in a pretty good spot in regard to wood availability and well positioned to take advantage of anything new down the road."

     Bilodeau says that, in Maine's pulp and paper industry, there are upswings and downswings and "temporary displacement" of workers is not uncommon.

     As for Domtar's now-silent paper machine in Baileyville, Bilodeau points out, "It's not the oldest relative to the competition, but it's relatively old. The majority of them in Maine were built in the '50s and '60s, and a lot are nearing the end of their useful life. We have aging assets in North America relative to Europe and Asia. The [average paper machine] in Europe was built in the '70s. In Asia, the '80s and '90s."

     Bilodeau also says the Woodland mill paper machine was considered small for the grade of paper Domtar was making, "but it's not outside the realm of possibility" that it has a future. "It's still usable, but [the owner] would have to have a high-value product -- the right product and lower volume."

     He points out that the conversion of wood into fuels and energy is progressing in Maine. "We'll be implementing the first commercial application in the Old Town mill within a couple of years. That would be applicable to other mills."