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Management Side
Newly acquired mill will idle indefinitely

NEWBERG, Oregon (From Pamplin Media Group) -- Just two weeks after a $288.5 million sale to Georgia-based WestRock was finalized, workers were told the former SP Fiber Tech paper mill in Newberg will cease operating indefinitely within the coming weeks.

"We announced today that the mill will be idled indefinitely," human resources manager Stace Gordon said Thursday. "It's not a permanent closure, but idled indefinitely."

He said operations at the mill, which began as a lumber operation in the 1800s, would probably continue for the next 30 days to Nov. 15.

While Gordon referred questions about the reason for the closure to the corporate offices of WestRock Company, which recently purchased the facility from SP Fiber Holdings, he said "business conditions" played into the move.

Phone calls to WestRock, headquartered in Norcross, Ga., were not returned.

In the past the mill has been idled during downturns in the economy or for a lack of newsprint orders, but only for a few months. The mill has roughly 220 employees in all, including about 180 employees represented by the Association of Western Pulp and Paper Workers Union, Local 60.

"We've been in discussions but at this time it's being deemed a layoff and not a termination," AWPPW area manager Bill Martello said.

An important difference between the terms is in a termination there would be severance pay and other contractual provisions involved, Martello said.

"You don't pay severance for a layoff," he said. "They're not going to have their jobs, they're going to be on unemployment, their medical benefits will not end right away and will be carried on for some time. That's basically it."

He added the workers have recall rights as part of their contract, meaning if the company were to resume operations at the mill the first people laid off would be the first asked to return.

"It's pretty much a shocker to us," mechanic Chris Brown, who has worked at the mill for 10 years, said of the closure. "It's gonna be a blow, big time."

The announcement was made at 10 a.m. Thursday morning, Brown said, adding that he was told workers will perform "an orderly shutdown" around mid-November.

"I'm in shock," he said. "I'm 52 years old and I've been `mechanicing' for 25 years, been in heavy industry for 30 years. I really don't want to go find something else to do, this is all I know."

Just 15 days before the closure was announced WestRock completed its acquisition of the SP Fiber Holdings company. The Newberg mill as well as a facility in Dublin, Ga., were turned over to WestRock through the $288.5 million sale.

"Both WestRock and SP Fiber have strong track records of product quality and innovation, and we are excited about combining our resources to enhance our offering of paper solutions for food service, corrugated packaging and other markets," Westrock Paper Solutions president Jim Porter said in a release about the transaction.

Two months prior in early August, statements about the sale were even more direct about the mill's benefits to the WestRock company.

The acquired SP mills "will balance the fiber mix of our mill system and the addition of kraft and bag paper will diversify our product offering."

"We expect to apply our operating capabilities to improve the cost structure of both mills," said Steve Voorhees, CEO of WestRock in a release. "As a result, our mill system will be better positioned to serve the increased demand for lighter weight containerboard and kraft paper."

What happened between that August announcement and the news that the mill will close is unclear, but Brown said he and other mill workers were told the mill is operating at a loss of $2.5 to $3 million per year.

Martello said his understanding was that market conditions were behind the closure, and that WestRock idled machines at two other facilities recently.

But the sudden announcement Thursday took many at the mill off guard.

"We've been owned by them for two weeks," Gordon said. "It's a massive surprise, I would say."


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