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Fibre is seen at sunset earlier this month. The company will launch rolling shutdowns starting Nov. 10. Bill Wagner / The Daily News

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Temporary Fibre shutdowns to begin Nov. 10

Thursday, October 30, 2008 11:37 PM PDT

By Tony Lystra and Erik Olson

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Longview Fibre announced Thursday that it will suspend production on its five paper machines during a six-week “rolling shutdown” in November and December, fueling concerns about the long-term future of the company’s pulp mill operations.

The company said it plans to restart the machines in December.

The company had no details on the number of layoffs involved, Fibre spokeswoman Laura Prisc said. Fibre said it arranged some of the machine shutdowns to maximize use of vacation time.

In a statement, Fibre said the continuing national economic downturn and drops in orders for many of its products led to the move, which came just 10 days after the company announced it was shutting down No. 9 paper machine indefinitely and laying off 90 workers.

All remaining five machines will be shut down a portion of the six week period. During Thanksgiving, only No. 7 paper machine will run.

“This will enable the company to keep the machine ‘warm’ to avoid the significant costs associated with a complete shutdown and cold re-start,” according to a Fibre news release.

Fibre is planning to shut down the No. 5 machine first on Nov. 10 for about three weeks, according to memo obtained by The Daily News from Fibre President Frank McShane to employees.

The No. 11 paper machine will be shut down Nov. 17-28. Nos. 10 and 12 machines will be down Nov. 21-Dec. 1. No. 7 machine will be shut down about two weeks starting Dec. 8.

Fibre is grouping the shutdowns of machine No. 10, 11 and 12 to allow workers to use as much vacation time during the Thanksgiving holiday as possible, according to the memo.

The company also said the changes would cut production at the plant by more than 30,000 tons of paper through the end of this year.

McShane said in the statement: “We understand this curtailment will affect all aspects of our business and will create hardships for our employees, but it is a necessary action to protect the long-term health of our business.”

McShane also said the announcement was all the more difficult because of the coming holiday season.

“The reality is, there is no good time for this kind of message,” he said.

Rolling shutdowns are common for pulp and paper companies during slow economic times, and they don’t necessarily mean a company won’t rebound, said Paul Latta, a forest products industry analyst with Seattle firm McAdams Wright Ragen.

“It’s just a cyclical industry,” Latta said.

Workers and union officials have speculated that Brookfield Asset Management, which bought Fibre in April last year, might be preparing to shutter or sell the mill and keep the more valuable timberlands.

Traci Wills, a former Fibre worker who left the company 18 months ago, spent Thursday fielding calls and e-mails from former co-workers still at the plant. They told her they’re afraid the temporary shut down will lead to permanent reductions and closures.

“They’re pretty much under the impression that the time clock is ticking and it’s just going to be a little bit (shut down) at a time until there’s nothing left,” Wills said.

A six-week curtailment is unlikely to cause job losses in other sectors of the local economy, said Scott Bailey, regional economist for the state’s Employment Security Department.

“It sounds like employment effects will be small and temporary,” Bailey said.

The biggest impact will be on workers and their families, he said. “We’re in a recession, and these kind of things happen.”

When Toronto-based Brookfield bought Fibre for $2.5 billion, Fibre had been losing millions of dollars. Since then, Fibre has shut down its Nos. 2 and 8 paper machines as part of a restructuring plan to shed 300 union and salaries jobs by 2010. The 90 job losses relating to the shut down of No. 9 machine are in addition to that number.

When they announced the shut down of No. 9 machine, Fibre officials said they were turning a profit, but not enough for Brookfield’s investors.

“Our focus is to make the business competitive and successful,” Hugh Sutcliffe, managing partner for Brookfield, said Thursday.

Brookfield, a multibillion dollar company with real estate holdings across North America, made a profit of $307 million through the first two fiscal quarters ending in July. That was down from the $348 million profit during the same period last year, according to the company.

Daily News reporter Barbara LaBoe contributed to this story.

Related documents:

Oct. 30 Fibre press release

Memo from Fibre President Frank McShane to employees

Related articles:

Fibre news blindsides local leaders

Fibre timeline: 2005-2008

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Billy Hill wrote on Oct 31, 2008 12:00 AM:

" Quote: When they announced the shut down of No. 9 machine, Fibre officials said they were turning a profit, but not enough for Brookfields investors. .... In todays world of business greed knows no bounds. Just look to the east. Ethics are a thing of the past. ANY company in the paper/lumber business under an Obama administration will be lucky to survive let alone profit. The people running Fibre are not cut from the same cloth as those who built the company and this town. They are at best money changers and nothing more. They do not have the will, want, work ethic or moral values to do the "right thing" for the People of Cowlitz county. So, get out while you still can or hunker down and try to wait it out. It will take years maybe decades before we see an economy like it has been the last 16 years under Clinton/Bush with a Republican congress. Brookfield and Co. are fair weather friends in the used car business with all the morals and ethics of the aforementioned. Shine it up, sell it of, seeya wouldn't wana beya. Here today and gone with your money tomorrow. WATCH! "

UW Squirrels wrote on Oct 31, 2008 1:12 AM:

" That's what people are telling me that are fimiliar with other mills, that this is a common thing. One of my professors said that paper mills do this back east all the time, and it's not really something to be terribly worried about. We'll see... "

skibowlruler wrote on Oct 31, 2008 5:21 AM:

" blame canada.... ready set go "

Lindengroves wrote on Oct 31, 2008 7:50 AM:

" This is clearly a consequence of the failed Obama presidency. "

CRfisherman wrote on Oct 31, 2008 8:01 AM:

" It's too bad that profits are all these large companies care about. Gotta keep the investors happy with their 50 cent increases on their stocks. I know it's how the world works, but there are real people and families behind all the these paper machines they are shutting down. Good luck to everyone involved. Hoepfully this is a temporary thing, for their sake. "

CRfisherman wrote on Oct 31, 2008 8:02 AM:

" That and Brookfield only profited $307 million this year....what a lousy take. Gotta pick that up!!! "

Roudyruss wrote on Oct 31, 2008 8:29 AM:

" I wonder if daddy Wallenburg feels guilty for turning the company over to his son who took about five mintues to then sell it to Brookfield? "

TDN Bad Boy wrote on Oct 31, 2008 8:38 AM:

" Billy Hill, you are so totally misinformed. You have not had a Republican Congress for the past 16 years. The Democrats controlled both houses from from 1992-94. The GOP won control of the House and Senate in 1994. The Democrats regained control of the Senate in 2000 when Lieberman switched parties. They won the House back in 2004. So the past 16 years have been a mix. The Republicans controlled both houses for 6 and the Democrats for 6 with the other 4 split. So please get your facts straight. You will at least appear somewhat educated. The problem with Fibre is that Liberals in this state have made business difficult in this state. Da Tax Queen is union-controlled and business pays the price when that field is not equal. If I were a Fibre union employee today, I would not be very happy with governor. She has done nothing to protect their jobs. "

cabbie wrote on Oct 31, 2008 8:40 AM:

" these temporary layoffs arent the only ones yesterday there were people told that today would be their last day happy holidays "

towboater wrote on Oct 31, 2008 8:41 AM:

" Hope I am not naieve.
Paper Mills require trees, water and a resonable shipping infastructure...these are all huge LFCO assets.
Aluminum plants require POWER, at one time power was abundant in this area.
I dont see the similarity with Reynolds, rather...I remember when Crown Zellerbach was sold. Everyone feared the worse. Then James River was sold...GP is now thriving in Wauna. Publishers sold...now employee owned.
BC St Helens is shutting down.

Government Sponsored Environmentalists require these mills to emit clean Air and water...which is great. Yet, the same Gov Environmentalists DONT REQUIRE the same emmission rules for products we IMPORT.
Thus...we dont have a level playing field.
Yes, it scares me because Brookfield (Whoever) cant make a profit competing against the Unregulated Foriegn Paper markets. "

spete98611 wrote on Oct 31, 2008 9:12 AM:

" Do any of you really believe that the President of the United States has anything to do with corporate America? The corporations have no interest in the personal affairs of their employees regardless of the size. The bottom line is their bottom line and that's it. If they can find a better deal they're going to take it just like you. Allegiances are made in order to profit and are quickly discarded when something more promising arises. Some employees form an allegiance with their company but sometimes discard it when an opportunity eleswehere arises. Is this unethical for a company to do? No. Business is business no matter how personally it is taken by some. It's cutthroat. Politics is politics and money is money. Sometimes you can make money with politics but politics doesn't cause a major effect on money. Not in regards to the President. Smart corporations can prevail in the toughest of times by playing the game. And unfortunately, the employees are a big part of that game. Don't make a company's decision a political statement. It's about their money not you and your personal affairs. Wake up from the fairytale of "I'm special and shouldn't lose my job" for everyone is expendable. "

bert wrote on Oct 31, 2008 9:13 AM:

" Towboater: How do you define profit? Doesn't 1/3 of a billion dollars qualify as profit? "

Mr. Bastinado wrote on Oct 31, 2008 9:17 AM:

" Lindengroves, you killed me with that one. Bad Boy, shame on you. You know that Forbes Magazine rated Washington State No. 5 and then No. 3 in 2007 and 2008, respectively, as the best state in the union to do business in. "

funnyone wrote on Oct 31, 2008 9:20 AM:

" Has it been confirmed that Boise St. Helens is shutting down towboater? Last I heard that was just a "rumor" "

Taffeta wrote on Oct 31, 2008 9:32 AM:

" Roudyruss~ I don't believe Mr Wallenburg (Sr.)is well enough to even feel guilty at this point. Bless his sole this man is one of a kind. "

pacnwmom wrote on Oct 31, 2008 9:33 AM:

" Bert~ I belive he's talking about Fibre's profits, not Brookfield. Fibre did not pull in 305 million in profit last year.

CRFisherman~ Profits are what companies care about, huge corporations or small ma and pop stores. If you don't have a profit, your in the red. Obviously that won't get you very far. Creditors/Investors make they world go round, when they start to pull away you end up with the stock market crisis we have today. "

Tempest wrote on Oct 31, 2008 9:49 AM:

" Good thing that new Wal-Mart Supercenter is coming in! These displaced workers can all get jobs there! *rolls eyes* "

Taffeta wrote on Oct 31, 2008 9:59 AM:

" Roudyruss~ I don't believe Mr Wallenburg (Sr.)is well enough to even feel guilty at this point. Bless his sole this man is one of a kind. "

THE GREG wrote on Oct 31, 2008 10:01 AM:

" Most of you are full of it, I got laid off from Fibre this year, I know what it is like for the first time in my life to have to strugle to make ends meet. But lets not blame the Wallenburgs for this mess, These people hung on to this turd for as long as they could for this town, yes they made some money but they also had the mill for eighty years. Let's see all of you yahoo's do any better. "

TDN Bad Boy wrote on Oct 31, 2008 10:06 AM:

" Bastinado, what is your business expertise? Reading a magazine or actually owning and operating a business with a Washington State Business license. I fall into the latter category and I can testify as a business owner that the laws and regulations established by this state and practiced by Da Tax Queen are not pro-business. The fact is she is bought and paid for by the Liberal-controlled unions in this state. Accordingly, she will do nothing that will help businesses protect worker jobs. It hasn't happened in the past 4 years and it won't happen in the next 4 years if Rossi is not elected. You can bet on it. So read your magazine. But listen to those of us in the real world who have to function under the government of this state. It is not business friendly because Da Tax Queen is not business friendly. She is union-controlled. "

Mr. Bastinado wrote on Oct 31, 2008 10:31 AM:

" Dearest Bad Boy; Being that business EXPERTS rate this state head-and-shoulders above others in regards to pro-business concerns, I must submit to you that if you are having such a difficult time doing business in this state, that some people are just better at doing business than others... "

Mr. Bastinado wrote on Oct 31, 2008 10:50 AM:

" The Greg; I agree with you whole-heartedly about the mill and sympathize with your (and other's) plight. Just remember that Dino Rossi has a very consistent track record of voting against unemployment benefits. He has also consistently voted against UI extensions for lumber and aerospace workers. Fibre workers (and any at-risk workers) may want to check out his senatorial track record before casting their votes. "

bert wrote on Oct 31, 2008 10:55 AM:

" Pacnwmom: I realize he is talking about Brookfield's profits. My point is that $305 million is not enough? "

jhzile wrote on Oct 31, 2008 11:53 AM:

" Well, time to hammer out steel beaks and glue them to baseball caps that say "picking crap with the chickens" "

crguy wrote on Oct 31, 2008 11:59 AM:

" Don't any of you people know how to spell Wollenberg?? "

pearl wrote on Oct 31, 2008 12:31 PM:

" HPW LONG TILL WE SEE A REPEAT OF WHAT HAPPENED IN POOR VADER HERE? "

Billy Hill wrote on Oct 31, 2008 12:41 PM:

" TDNbb, your little history lesson is tedious and sophomoric. It is not possible in 250 words to to explain nor would the readers of TDN understand the ramifications or economic conditions of, let alone the psychology or nominal platitudes which create an acceptable paradigm in which business can flourish and economic growth/expansion can occur with increased revenue to the federal government without detrimental effects on individuals while maintaining industry accepted percentage parameters, politically viable protocols of debt to growth ratios pertaining to overall budget projections. Simplistically, the party who can create the illusion of "well being" or "change we need" will assume power/privilege with no regard what-so-ever to "the people" and in many cases themselves. This afternoons history lesson please google Kenneth Lay. Now, stop the sillyness and get back to work. If you are a Fibre employee, they got their eyes on you and are quit possibly planing your departure. "

Atrucker wrote on Oct 31, 2008 1:28 PM:

" I agree with spete98611. It is all about the Money. If you do not please the investors , you get little or no credit , to keep your doors open . It is not about YOUR J_O_B. You are expendable at any time . The old Fibre lost money for years , so everybody had a J_O_B that worked there got paid.
This is not how business works! Blame Obamma ? Chrissie? Get a life .
When the money is not there , things are done to fix it . Yes Brookfield made some money . What does it cost to run that mill for one day. ?
Then think about all the self centered answers I see on here .
It is called SHOW ME THE MONEY, we are in a bad recesstion right now and credit is tight , that is the bottom line . I know I sound mean , but It is what Brookfield is saying only nicer. "

bdha wrote on Oct 31, 2008 2:00 PM:

" sell the land build a an LNG plant problem solved "

Taffeta wrote on Oct 31, 2008 2:05 PM:

" Roudyruss~ I don't believe Mr Wallenburg (Sr.)is well enough to even feel guilty at this point. Bless his sole this man is one of a kind. "

bert wrote on Oct 31, 2008 2:10 PM:

" Brookfield, as any other company, big or small, is not going to pre announce their closure. The reasoning is very simple. They can not afford a mass exodus of their experienced work force. The other shoe will only drop when they are ready to drop it. "

TDN Bad Boy wrote on Oct 31, 2008 3:21 PM:

" Billy Hill, you have no idea of the impact of state government and how much more of a factor it is to 99 percent of the business than the federal government. I agree with you about what will happen to the industries that rely on natural resources under an Obama administration. I just disagree with you on your statement about 16 years of a Republican Congress. That's just incorrect and misleading. Still it's the state, Billy Hill, that has a bigger impact on business procedures, protocols and contracts. If you don't know that, stay out of the business world. These layoffs are a direct reflection on the lack of backbone in Olympia. Da Tax Queen is not pro-business. And by the way, I would never have worked at Fibre. I would never join a union. I own my own business and have for more than 30 years. "

Tortoise wrote on Oct 31, 2008 3:29 PM:

" Lindengroves: I hate Obama, but your comment cracked me up. It's true, people on here are already practically blaming Obama for this. If Fibre totally shuts down even a month after Obama is sworn in, it will still be Obama's fault and not Bush's failed economic policies. Anyway, thank you for giving us a little humor here. "

UnionProud wrote on Oct 31, 2008 4:30 PM:

" TDN Bad Boy. I wonder how much of your 30 year business is supported by us union dogs.Have you ever let your feelings about unions be known publicly or just in hiding like a coward. Just something to consider. "

sgourley2b wrote on Oct 31, 2008 6:31 PM:

" This is not the first time the papermill has had to shut down due to lack of orders. Years back, in the 80's during the "Reagan" years, there was a "recession" which no one would admit to for some time. However, during that time, the mill would shut down every 6-8 weeks for a week. This went on for several months. Christmas time, the mill would shut down for about 10 days (for several years in a row). One made sure to save at least a week of vacation, because holiday pay would screw up any chances of unemployement. I do hope that Brookfield has no plans of shutting the plant down completely. Several family members work there and are within 10 years of retirement. Plus the fact that Longview does not have too much to fall back on as far as family wages are concerned.

As to blaming Obama? Get real - we all know what has happened. It is not the first time that "trickle down economics" didn't work. So, tighten the belt, be very careful on what you spend money on. We are "all" in for a bumpy ride. "

speak into the microphone wrote on Oct 31, 2008 7:41 PM:

" Okay everyone listen up: THE ROLLING SHUTDOWN IS FOR SELLING ELECTRICITY BACK TO THE POWER COMPANY!It is not just lack of orders. Do your homework and mark my words. I did mine,,,, "

Thought wrote on Oct 31, 2008 8:31 PM:

" Re- Towboater

Crown Zellerbach wasn't sold!! It was taken over by Sir Goldsmith which split it up into timberlands and paper. James River bought the mills the bought out Fort Howard thus becoming Fort James. After they ran it into the dirt they sold it to Georgia Pacific which shuttered some mills. Kock Chemicals bought out Georgia Pacific who then shut down several other mills. It appears on the outside that the Wauna mill is thriving but its doing so on the backs of its employees.My point being is that once a mill is sold its a downward spiral. On the surface Waunas hiring appears that the mill is prospering but the reality is that anyone that can is leaving. By the end of next year they will have lost about 50% of their experienced people.It will survive but only on paper not by its own merits!!! "

tired wrote on Oct 31, 2008 11:19 PM:

" spek into the microphone:That was funny,selling back electricity to the power company.We haven't ran the co-gen power plant down here for a while the cost of natural gas is too high to make a profit.The boilers down here that burn bark and reject wood make electricty for the mill not really enough surplus to sell back.On top of that Fibre had to re-work the contract with BPA because of the fact they were making lots of money on selling back.You should know that a government ran place(BPA) doesn't want to have to pay out money to anyone.They are the only ones that want to get payed. "

DW wrote on Nov 1, 2008 10:05 AM:

" Well look on the bright side....If Fibre shuts down, Wal-Mart probably won't come to Longview with a gigantic super store. Ha, so there. I will ad my two cents to this "Union" argument though. I think the unions, as concept, are a good thing. The problem now is that they cater to the lowest common demoninator. I have seen this in my industry for 20+ years. At one time, if a store was having an issue with, say, a union meat cutter, the union rep. would come in a rip the cutter a new rearend if he needed to. Now, if a union employee isn't worth his/her salt, they don't care as long as those union dues keep getting paid. In fact about the only time a I see a union member get into trouble with the union is when they get behind on their dues. The other problem I see with the unions in this country is that they are pricing themselves out of the job market in a global economy. If unions are to survive, they should rethink how they conduct themselves, and as the Messiah Barack Hussein Obama would say, they need to "change". But I don't see that happening anytime soon. In the meantime, unions will continue to shrink in membership, and as long as they have a hostile relationship with bussiness, they will not recover. "

dwh wrote on Nov 1, 2008 10:47 AM:

" Doesn’t journalism investigate large company’s anymore?
Brookfield seem to be targeting an age group in the Salary department? Many have been let go and have 38 yrs of service and are 54. Funny how at that age they cannot draw there retirement, well they can at 55 at a great reduction. The buy out after 30 to 38 years they will get 1000 per year of service up to 10 years. Hmmm that is two months pay or less for most salary…How long will it take you to find another job? Salary still had medical when they retired at 55 they would continue to have insurance until 65. Hmmm wonder how many dollars that will save Brookfield per employee? If you have worked at one place from the time you graduated from high school, then how do you keep paying your bills & keep your home? Oh and unemployment for your 30 plus years of continuous work you will receive 500 dollars a week minus taxes. Who will hire a group of 50 year old??? Brookfield is doing it by the book by letting some younger people go and keep one or two 54 year olds but the majority of all Fibre workers have been there since high school and they have no education to move on and make a good living @ 50 plus. You could go back to school mean while who pays the bills? This company is very savvy in the way they have handle the selling of a lively hood for many Cowlitz County employees. I know this is all business and they are in business to make money. But, If you have 4 month’s, or 10 month’s or 4 weeks to go before you are 55 years old and could draw your retirement and have medical coverage at a reduced rate. Would you feel that this business is ethical? I know there are laws but I also know that Brookfield has many powerful lawyers guiding them through the legal process. OK… I’m sure your thinking what about the hourly. Well most of them with 30- 38 years 0f service are retaining there jobs based on the union laws and there seniority. I also know the hourly would say they knew that when they took those leadership possession they where not protected by the union anymore but who thought this would ever happen. I guess there is a naivety about Cowlitz County family’s. Even after the Reynolds Company went down this same road. I left Fibre 10 years ago after 23 years of working there. I still have friends and family that are struggling and fearing they will loose everything they worked so hard for, for many years. I also know that in this country we have sent our production jobs over seas. It is the survival of the fittest. So sad that “greed” has arrive to Cowlitz County . So sad that 14 million in Timber is not enough money…. Why do those who have to have more? "

Kalama Dude wrote on Nov 1, 2008 12:32 PM:

" For Thought; I work at Wauna and things are going very well. The machines are sold out through the first quarter of next year and the company is up 7% overall year over year, where KC is down 5%. The mill profit is up maybe 20% due to the new Brawny machine and converting operations. Before you spout off about the fact that everyone is leaving and 50% will be gone, maybe find out why some will leave in the next year, it is because THEY CAN. The union contract is coming due and they will benefit by retiring before it ends instead of after at end of 2009. This is their decision and probably a good one for them. It has nothing to do with mill conditions or any short term or long term business problems with the mill. Again, read any report you like, the mill is booming and people are applying to work there by hundreds, more now from Fiber or St. Helens which is also curtailing some operations, though you wouldn't know that here. It is so ridiculous to read comments people make when they nothing about the truth. You come off sounding like a fool and then everything you say comes into question, just like silly ramblings of Bad Boy. The whole truth about Fibre will be clear early in January and then this region can truly start working to move on and somehow make it better. Good luck to all and God Speed. "

DW wrote on Nov 1, 2008 2:00 PM:

" I wonder dwh, why the union can't go to the employer, Fibre, to see if there would be a way for the union, and the employer to work out some kind of deal that would make sense for both. The Union would have to "change" to save jobs and the employer might be able to make the company a profit that fits their business model. Remember, Barack Obama is a about "change". You may want to think about something else too dwh. If Obama is all about "spreading the wealth around", and he is elected president next Tuesday, the people that, as you put it, "have" aren't going to "have" as much anymore. The consequence to that is they will "change" the way they do business, and you will see more Fibre's out there, and the mill worker will get absolutely nothing, as the wealthly employers bleed to death from increased taxes. Makes sense eh!! "

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