Story originally printed in the La Crosse Tribune or online at www.lacrossetribune.com

Published - Friday, December 14, 2007

Paper mill to close next year

By BARRY ADAMS / Lee Newspapers

Community leaders in the Wisconsin Rapids area have been preparing, but the impact of losing hundreds of jobs will still be a difficult pre-Christmas pill for many to swallow.

Montreal-based Domtar announced Thursday that its paper mill in Port Edwards will close in the second quarter of 2008, resulting in the loss of 500 jobs.

"Certainly there is an awareness that the paper industry has had an amount of global competition that has made it a different landscape," said Connie Loden, executive director of the Heart of Wisconsin Business & Economic Alliance in Wisconsin Rapids. "With that understanding, there has been a shift in the last four years that has moved toward expanding our base and exploring new alternatives."

Loden said the community has job training programs in place and, over the past four years, her organization has teamed with the Community Foundation of South Wood County to develop entrepreneurial and new industry opportunities.

The mill, just south of Wisconsin Rapids, about 100 miles north of Madison, produces uncoated paper and has an annual production capacity of 165,000 tons. Domtar also announced it is reducing capacity and reorganizing production at its mill in Dryden, Ontario.

Combined with the Port Edwards closure, the measures will result in a permanent reduction of Domtar's annual production capacity by about 342,000 tons.

In August, Domtar announced it was shutting down one paper machine at the Port Edwards mill. "In spite of years of sustained efforts from our dedicated employees as well as from the company, high costs posed significant challenges to these facilities," said Raymond Royer, president and chief executive officer of Domtar. "These measures were necessary to make Domtar an even stronger company. They also reflect our commitment to our customers and stakeholders to be the most efficient producer in North America."

Company spokesman Craig Timm said employees were notified on the floor of the facility and in organized meetings on Thursday. Employees who were not scheduled to work Thursday received the news in a telephone call from human resources.

It was not made clear Thursday how the closing would happen. Timm said the closing process was a "detail that's to be determined."

It was also unclear how many employees with union positions would be able to bump other people out of similar union jobs at the company's paper mill in Nekoosa, just downstream from Port Edwards on the Wisconsin River. That facility employs about 430 people.

"There are certain bumping rights," Timm said. "Depending on the contract language, that is a possibility."

In 2001, Georgia-Pacific Corp. sold the two Wisconsin mills, along with two other mills, to Domtar in a $1.65 billion transaction. G-P acquired the mills when it took over Great Northern Nekoosa Corp. in 1990.

There is an additional element of uncertainty in the Wisconsin Rapids area as the community awaits a new owner for the Stora Enso paper mills, which are concentrated in central Wisconsin.

In September, European-based Stora Enso announced an agreement to sell is North American division to NewPage Holding Corp., an Ohio-based coated paper producer. NewPage is owned by the private equity firm Cerberus Capital. Stora Enso will retain nearly 20 percent ownership in the mills.

The deal, expected to be completed in the first quarter of 2008, involves papermaking operations in Biron; Kimberly; Niagara; Stevens Point; Whiting; Wisconsin Rapids; Duluth, Minn.; and Nova Scotia, Canada.

Stora Enso acquired Wisconsin Rapids-based Consolidated Papers in 2000.

State response

Gov. Jim Doyle said Thursday night that several steps are being taken in response to the planned closing of the Domtar paper mill in Port Edwards:

• The Department of Workforce Development will send a team to meet with the affected employees to expedite unemployment claims and give workers access to job training and placement services.

• The North Central Wisconsin Workforce Development Board will get a $25,000 grant to provide services for workers.

• DWD will work with the company and the union to apply for Trade Adjustment Assistance benefits from the U.S. Labor Department, which may allow for the extension of unemployment benefits for two years and additional education and re-training funds.

• DWD will apply to the Labor Department for more money to assist workers through the National Emergency Grant program.

• Department of Commerce Secretary Jack Fischer will meet with Domtar to discuss whether state assistance could keep the plant open.

Barry Adams is a reporter for the Wisconsin State Journal in Madison.