Red Shield plans layoffs
11/27/08 | 10 comments

Red Shield plans layoffs


Pulp market crash blamed for Old Town mill’s problems
By Abigail Curtis
BDN Staff

OLD TOWN, Maine — Many of the recently rehired workers at the Red Shield Acquisition pulp mill have received an unwelcome holiday surprise — news that they will be laid off again, at least temporarily.

Although about 110 employees were working there this week to operate the biomass boiler and winterize the mill, a local mill official said Wednesday that the number of workers there soon will decrease.

“Next week we will be dropping the number down to about 75 and in the coming weeks it’ll be closer to 50,” said Dan Bird, human resources manager. “As I was bringing [workers] back, the bottom was falling unpredictably, unexpectedly out from underneath us, to a point where it was not viable to run our pulping operation — which is really our only revenue.”

Bird said that he was in the process of rehiring all 180 laid-off workers to return to the mill, which was purchased at a bankruptcy auction about a month ago by a New York investment firm. Then the pulp market crashed.

“Some people will say, ‘You should have predicted this. Why did you bring everybody back?’” Bird said. “But we had double-digit percentage decreases [in price] in just a matter of days.”

Other pulp producers around the country have been negatively affected by the soft market, including Verso Paper Corp. in Bucksport, which is idling one of its four papermaking machines this month, and International Paper, which “indefinitely” closed a Louisiana paper mill last week that employed 550 people.

Bird said that Lynn Tilton, the new owner of Red Shield Acquisition LLC, wants to diversify.

“Her vision is to turn the facility around by diversifying it, so we’ll have these other markets and other products, to buffer our overall business,” Bird said. “The pulp market is very high, very low. It’s a roller coaster.”

Tilton is the founder and CEO of New York investment group Patriarch Partners, which bought the bankrupt mill last month.

In a statement released Wednesday, she had reassuring words about Red Shield Acquisition’s future.

“Despite the sudden drop in pulp pricing, our enthusiasm for this long-term project has not waned,” Tilton said.

According to Bird, the timing for the mill’s intended restart was unfortunate.

“We’re going to restart here. It just didn’t make any kind of business sense to do it right now,” he said. “We’re not insulated from the rest of what’s going on in the world. There’s just an oversupply [of pulp] and diminished demand.”

This is the latest chapter in the troubled history of the mill.

About 400 workers lost their jobs in May 2006 when Georgia-Pacific Corp. officially shut down the mill, which had operated in Old Town for more than a century.

The Red Shield investment group bought the mill in September 2006 in hopes of reinventing the facility, but cited rising costs for materials and fuel when they idled the facility last June.

Patriarch Partners, the new owner, specializes in turning around “distressed” businesses, according to its Web site.

Tilton said that the Red Shield management team was “carefully planning our capital expenditures and gauging the markets.”

“Once the basic operating economics and pricing find equilibrium, we plan to restart production,” she said.

acurtis@bangordailynews.net

990-8133

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Comments
10 comments on this item
On 11/27/08 at 10:49 AM, David889327 wrote:         Repeated separate thumbs down will cause comment to be hidden

50 is better than 0.

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On 11/27/08 at 11:16 AM, PeterTaber wrote:         Repeated separate thumbs down will cause comment to be hidden

Baldacci and his gang of mediocrities are only proving their primary interest is in looking after dying heavy industry. Guess what, folks. Unless the U.S. decides once more to assert itself as a nation state and not be part of the global rush to subordinate everything to the desires of the super-rich (fat chance of that!), it's guaranteed that the paper industry is over in Maine. The workers at Red Shield are being lied to about the future. Burning out-of-state construction and demolition waste in the furnaces of the last remaining paper mills to make electricity to run the New York subways is a pathetic end to the business. So is making a little pulp to be shipped to Canada to be finished into paper. Let's get real and see these workers trained to do something that really benefits the state and, in the long run, themselves. And how about paying a little more attention for a change to the nine out of 10 Maine workers who are either self-employed or who work for a micro-business (up to five employees). Oh, I forgot, they don't hire many lobbyists or pay many bribes (oops, I meant campaign contributions) to the Demopublican or Republicratic parties.

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On 11/27/08 at 11:19 AM, Knightscross wrote:         Repeated separate thumbs down will cause comment to be hidden

What a way to run a business. Hire fire hire fire hire fire.

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On 11/27/08 at 11:39 AM, David889327 wrote:         Repeated separate thumbs down will cause comment to be hidden

Peter, I think you are seriously misguided in your analysis. Baldacci and co. are trying to show support for the unions, not the corporations, though they are by nature intertwined. The unions are a principal constituency for Democrats. If not for the unions, Baldacci and his minions would be DELIGHTED to see the departure of "dying heavy industry" from Maine, the SOONER THE BETTER! Then all the former mill workers can start to get serious about organizing the glorious tourism industry!

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On 11/27/08 at 12:38 PM, mike800z wrote:         Repeated separate thumbs down will cause comment to be hidden

there they are, two of the biggest nitwits that love to post about mill workers. what are you guys up to besides slamming us? comparing COMP checks?

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On 11/27/08 at 12:47 PM, David889327 wrote:         Repeated separate thumbs down will cause comment to be hidden

I (I can't speak for whoever the "other" is) am not insulting you as an individual. I do have concerns about unions. I don't think some unions have helped either you or your industry, except for in the short run. And I suspect that deep down you understand what I'm saying, but will never admit it.

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On 11/27/08 at 2:13 PM, Kevin_of_Bangor wrote:         Repeated separate thumbs down will cause comment to be hidden

Someone is going to snap and pull a Milton Waddams if this kind of crap keeps happening.

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On 11/27/08 at 4:58 PM, mike800z wrote:         Repeated separate thumbs down will cause comment to be hidden

for us in this situation its hard not to take it personal. we didnt ask for this, all we want to do is go back to work but we cant do anything until the economy turns around ( hopefully real fast ). Kevin of Bangor, i dont know who Milton Waddams is but all i can say is our Stress Levels are running MEGA HIGH right now and i dont see it dropping anytime soon.

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On 11/27/08 at 6:23 PM, luckyone wrote:         Repeated separate thumbs down will cause comment to be hidden

The paper industry has left this country in droves. Maine needs to focus on other means of revenue besides the old stand bys, like paper mills. Lets get some other ways to bring money into Maine. Everything is going GREEN and paper mills are not part of green. In fact, toilet tissue and paper towels are being replaced by re usuable micro fiber towels. Maine needs to get with the times. There is enough space in the Old Town Mill to produce blades for wind mills.

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On 11/28/08 at 6:41 AM, mike800z wrote:         Repeated separate thumbs down will cause comment to be hidden

i`d love to see (well not really) someone using re-usable toilet paper. better yet use a plastic sandwich baggie.

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