WESTBROOK, Maine (From news reports) -- Sappi's shutdown of the No. 9 paper machine and a biomass boiler -- and the resulting elimination of nearly 30% of the jobs at the Westbrook mill -- were a long time coming, union President Ron Rondeau said last Monday.
"These cut downs, they weren't unexpected. Everyone knew Paper Machine 9 was on its last legs, but no one thought it would be this soon," said Rondeau, president of USW 1069, the union representing most workers at the mill. "What is happening is no way in shape due to (COVID-19). The company has been looking at this for awhile, (but) the virus may have accelerated it."
The company reported in May that the pandemic has had "a relatively small impact on profitability."
Second quarter revenues from its pulp dissolving business and graphic paper sales were down roughly 30% globally, with U.S. retail sales down 8.7% since the pandemic.
While the looming job cuts have lowered morale at the mill, Rondeau emphasized that Sappi in Westbrook is still working.
"I wouldn't count Westbrook out, we've still got a good product," Rondeau said.
The No. 9 machine produced base paper.
Sappi is shifting base paper production to Skowhegan and a mill in Cloquet, Minnesota, to save costs. Paper from these mills will be shipped to Westbrook to be embossed and finished for the higher-end products Sappi produces in Westbrook, such as its new UltraCast Viva line.
"Unfortunately, the Westbrook mill's earnings have been under pressure as a result of widespread commoditization in the marketplace and legacy mill costs," Sappi President Mike Haws said in a press release. "This restructuring will enable Sappi to compete more effectively and allow the Westbrook facility to focus on its core competencies."
The company said it expects the reorganization to be completed by the end of this year.
Sappi North America also announced last week it will shut down a major part of its energy complex, resulting in the elimination of 40 of the total jobs slated for elimination.
"From what I understand, it's an older boiler, a biomass boiler," Rondeau said. "It's not competitive to run it to sell power. They will still need power, so the intention is to lease some boilers, they call them package boilers, to run the mill."
According to the Olga Karagiannis, Sappi's corporate communications manager, the Westbrook mill has about 260 employees. At its height of production in the 1970s, the mill employed nearly 4,000 people, according to City Historian Mike Sanphy. By 1990, the workforce was down to 2,000, but the mill still accounted for 38.7% of the city tax base, compared to 3% now, City Administrator Jerre Bryant said.
There will still be activity at the Westbrook site, Rondeau said, which is a center for the creation of their casting papers and the other more finished products.
"We will get the base paper from the other mills but we will still do what we do," he said.
While some employees are sad to see an older part of the mill go, change is not new, Rondeau said.
"With us guys that have been there in this time, we've seen a lot of this mill go. At one time, there was five paper machines, but over the years the company has shut and shut. So it's not something we haven't seen before, but like anyone, no one wants to see this happen. We got good workers, we make a good product," Rondeau said.
Jobs cuts will be phased in for the remainder of 2020, according to Sappi.
In the meantime, Sappi is exploring options to redevelop some of its Westbrook land, including bringing in other businesses, said Mayor Mike Foley.
"Whether or not they sell or lease the land, there's different options. With wastewater treatment and potential energy options on-site, this makes it desirable land for someone to locate," Foley said.
Sappi owns land around the city that may no longer be essential to its business, but exactly how much land and where is still being determined, Foley said.