Trouble in mill town | There's drama aplenty at the Katahdin Paper Co. mill in Millinocket
The Katahdin Paper Co. in Millinocket and its 208 employees have had a topsy-turvy ride the past few weeks, as its looming closure has created tension in the community and churned the rumor mill.
The news on Aug. 26 that the paper mill’s owner, Toronto-based Brookfield Asset Management, would close the mill indefinitely on Sept. 2 was not a total surprise, though Gov. John Baldacci criticized the company for poorly handling the announcement. Brookfield — which has $95 billion in assets — originally announced back in May that high energy prices were forcing it to shut down the mill. The company, however, postponed the closure as the state got involved and customers sent in more orders in an attempt to keep the mill viable. An official with Fraser Papers, which manages to Brookfield mills in Millinocket and East Millinocket, told the Bangor Daily News that the Millinocket mill, which makes paper for magazines and catalogues, has lost $54 million since it was restarted in June 2004.
The mill’s 208 employees held out hope, however, when Brookfield said negotiations over the installation of a biomass boiler that could help restart the mill had not been abandoned. Baldacci has said Brookfield officials, including its CEO, have assured him the mill, which burned 400,000 barrels of oil in 2007, would reopen in 2009 with a biomass boiler. “I will hold them to that commitment,” Baldacci told the Daily News.
The company’s plans for the mill have not escaped local criticism. Some people question Brookfield’s motives. Scott Gonya, a Millinocket town councilor and an employee at the mill, maintains that, contrary to the company’s assertions, the mill is still profitable and that Brookfield is shutting it down because the company can make more money selling electricity from the mill’s hydro generators on the open market than making paper, according to the Daily News. Gonya is proposing the town investigate the possibility of using eminent domain to seize the mill and its assets and turn it into a public utility — an idea several town councilors endorsed, but which Baldacci panned as too much of a knee-jerk reaction.
Regardless of what happens, what’s clear is that at least until sometime next year roughly 208 employees in the area face unemployment. Union officials told the newspaper that roughly 100 employees from the Millinocket would move to the East Millinocket mill, where they would bump employees with less seniority.
Whit Richardson
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