Fibre to cut 200 jobs in 6 months
Saturday, October 13, 2007 12:04 AM PDT
By Evan Caldwell
Printable version
E-mail this articleLongview Fibre will cut 300 jobs at its local pulp and paper mill --- about a quarter of its current work force -- during the next few years to make itself profitable again, the company announced Friday.
About 170 union workers and 30 salaried positions will be cut in the next two to six months, Frank McShane, Longview Fibre Paper & Packaging chief operating officer, said in an interview with The Daily News.
The cuts are positions that work with paper machines 2 and 8, which Fibre decided were no longer profitable after a four-month comprehensive review. That leaves machines 5, 7, 9, 10, 11 and 12 operational.
"This isn't just about shutting down two paper machines," said Hugh Sutcliffe, managing partner of Toronto-based Brookfield Asset Management, the firm that bought Fibre in April. "Over the past five years, the company has shut down four paper machines. The reality is that these machines are not profitable in this market.
"We looked at everything," Sutcliffe said. "If we just keep doing what we're doing, we'll be right back at shutting down machines in a few years, and that's not what we want. The machines have been losing money for a long time, it's been a downward spiral of business. We want to position the business to be successful in the longterm."
Number 2 and 8 machines use bleached paper to make products with color-printed finishes.
"Longview's market share in those products has been eroding for some time," Sutcliffe said.
McShane, Sutcliffe and other Fibre officials announced the new plans to workers Thursday and Friday before releasing the plans publically.
McShane said Fibre leaders and union officials with the Association of Western Pulp and Paper Workers Local 153 will meet next week to decide which union employees will be let go.
"We are going to start meeting Tuesday morning to give us a more definite idea of their plan," said Local 153 president Roger Fisher. "One of the big issues we want is a retirement incentive to entice some of our older people to retire instead of cut from the bottom. ... They have agreed to talk about it."
Fibre currently employs 968 union workers and 200 salaried employees in Longview, and company employment here has dwindled down from about 1,900 workers in 2000.
Speculation about potential job cuts has run through the mill since Fibre was sold, and workers were expecting more specific information than they received this week, Fisher said.
However, the company deserves "credit for not jumping into things. They are working with us and we appreciate that."
Gov. Chris Gregoire said in a statement Friday that her office will do what it can to help Fibre workers and find new jobs.
"I have directed the Washington Employment Security Department to form a rapid response team that will provide help filing for unemployment insurance, individual re-employment plans and, if necessary, assistance with training for new careers," Gregoire said. "They will work with the employees’ union and the management of the company to identify the needs of workers and to strategize and coordinate delivery of necessary resources and services."
The job reduction means at least $9.3 million in annual union salaries will be cut out of the local economy, based on calculations using the union's starting wage. However, the figure is likely to be much higher because of the experience level of the Fibre work force.
Salaried employees pay was unavailable.
Longview City Manager Bob Gregory said he was anticipating some changes but knowing the exact number of jobs cut will help in planning.
"There will be ripple effects from this," Gregory said. "More immediately, local retail businesses will be affected as there is not as much money that will be spent on goods and services. The exact impact will be difficult to predict but it will be felt by all."
Gregory said the city is still working to land more industry at places such as the Mint Farm Industrial Park to continue to diversify the local economy.
Fibre job cuts are the third big job losses for the area in the last 10 months. Northstar Yachts in Kalama and Fleetwood's manufactured home plant in Woodland cut a combined 195 people just this year when they shut down plants in those communities.
"The good news is that Fibre is not closing the mill, and they are making a real effort to make it a long-term business in the community," Gregory said.
Sutcliffe said he is confident the business move will be successful.
"Over time, the business has been losing cash, lots of cash, and you cannot do that for the longterm," Sutcliffe said. "If we do nothing, there will be zero workers there."
Sutcliffe said employees and the community "can stop worrying about the business totally going away."
"The question we were asked more than anything at the start was is this was, 'Is business going to survive at all?' " he said.
McShane said that after the four-month review led by Omni Continental, the company's new business plan "will optimize what we are doing well and run that more efficiently." For example, McShane said, two pulp digesters currently run at 60 percent and after the change, one will be shut down, and the remaining one will operate at near 100 percent.
Vancouver, British Columbia-based Omni Continental works with companies to improve machine operations through papermaking management principles, integrating new technologies and solving paper machine problems, according to its Web site.
"The employees knew change was coming because they are smart people," McShane said. They knew change had to be implemented, but there is still a lot of concern."
The plant administration and its seven Western U.S. box plants are still being evaluated and an updated business plan for those operations will be complete in the next six months, he said.
"Turning around the business that has been losing money for some time is not easy," McShane said.
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