Union workers in Rumford wait and hope while NewPage restructures
Photo/Amber Waterman
Matt Bean, local union president for NewPage's paper workers
Since 1899, the mill in Rumford has been making paper under a series of corporate owners, starting as the Oxford Paper Co. and transitioning to Boise Cascade and MeadWestvaco, to name a recent few. In 2005, it was sold to private equity firm Cerberus Capital Management for $2.3 billion and renamed NewPage to reflect a new chapter in the specialty coated paper maker's history.
But after continuing losses ($656 million reported for the year), NewPage filed for Chapter 11 bankruptcy protection last month.
Of the mill's 900 or so employees, about 700 are represented by the United Steelworkers Union, Local 900. Matt Bean, the local president, says workers are trying to stay optimistic as the company works on a plan to preserve the mill and their jobs. Since the beginning of the year, the company has been trying to restructure $4.2 billion in debt as it grapples with decreased demand for its high-grade paper used primarily in magazine and catalog publishing. Workers in Rumford were somewhat heartened to hear the company announce that preserving jobs and benefits would be a priority during its bankruptcy negotiations, says Bean, who chatted recently with Mainebiz. The following is a condensed and edited transcript of the conversation.
Mainebiz: What is the role of a union in a bankruptcy restructuring? Are you at the table?
Bean: We are trying to have a rep from the [national] USW at the table. But we are encouraged by the company telling us our collective bargaining agreement and benefits will be intact [through the restructuring process] and they plan on continuing our plans. But things can always happen in court. We have a team formed through the USW to keep things the way they are, but there could be things we have to work on.
What kind of a timeframe are you looking at?
There's an 18-month window to resolve the restructuring. My guess is it will go right to the end.
And the mood at the mill?
A lot of people are wondering how this will go and that creates some unease. We all knew Chapter 11 was an option, so it wasn't a great surprise. We're trying to be optimistic and hope for a solution that will keep the mill running. The dark side of any bankruptcy is that some people won't get paid what they're owed, but we're still getting paid, so that's a relief.
Are there any particular concerns among your members?
We're in the first year of a five-year contract, so there's hope that the contract will be honored. Plus the average age of our members is around 50. When you think about the future, it's not so far off. Pensions, naturally, are one of the strong concerns. We use a multiplier of 45. You get $45 for every year of service per month. It doesn't matter what your wages are. So a guy who's been here 20 years would get $900 a month.
What are your thoughts on how the mill got to the point of filing for bankruptcy?
Well, nationwide, what's happening with the paper-making industry happened to the textile, shoe and steel industries. It's the whole free trade versus fair trade argument. [Unfair foreign competition] has put us behind the eight ball. Obama has been moving in a direction to fix that — I just wish it would happen sooner rather than later.
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