As Norpac prepares to slash production capacity by nearly a third, the company confirmed Thursday that there could be fewer layoffs at the mill than originally expected.
The mill plans to shed less than 12 percent of its workforce – fewer than 50 people – when it idles one of its three paper machines at the end of October.
Norpac first announced plans to cut production capacity in August, but it has been unclear how many of its 400 employees would be laid off.
“Our team has worked hard to minimize employment loss to the furthest extent possible through careful transition planning, work changes and reorganization to the other paper machines as well as natural attrition,” Craig Anneberg, CEO of Norpac, said in a prepared statement.
“As a result, we expect fewer than half of the 100 positions associated with the operation of a paper machine will be impacted. For those employees impacted, transition resources will continue to be provided,” Anneberg said.
It’s still not clear yet exactly how many – or who – will be laid off. The company said it’s considering voluntary buyouts on a case-by-case basis.
According to Norpac employees, about 25 people have applied to a voluntary buyout option. For some employees though, the proposed severance packages aren’t large enough to entice them to leave.
“I can work there for half a year and make more money than I would in the severance package,” said one Norpac employee who has worked at the mill for nearly 20 years.
Mill workers, who are non-unionized, already faced a 10 percent wage cut and big reductions in retirement benefits in May.
The changes come as the mill’s new owner, One Rock Capital, struggles to make the facility more profitable after buying it out from Weyerhaeuser Co. and Nippon a year ago.
Some employees say they are expecting further cuts in pay – as much as $5 to $8 per an hour – as the company reassigns people to lower-paying positions. Several employees are quitting or looking for work elsewhere.
“Morale is terrible. People don’t want to be there. The sad fact is that people don’t care if the business is successful or not,” one worker said.
The soon-to-be idled Paper Machine No. 1 produces 250,000 tons of paper per year, about one-third of the plant’s current paper output, according to the company. Shutting down the machine will leave the mill with a capacity of 540,000 tons per a year.
The company framed the production cuts as a response to competition from subsidized Canadian manufacturers. In August, Norpac petitioned the federal government to impose antidumping and countervailing duties against Canadian papermakers. Norpac said mills in Canada benefit from 65 different government subsidies that allow them to sell paper at prices 16 percent to 65 percent lower than what it normally would sell for.
“As we seek to level the playing field under U.S. trade laws to counteract the dumped and subsidized imports from Canada, the closure of a paper machine has been a very difficult decision for everyone involved,” Anneberg said. “All of our employees have dedicated their careers to making Norpac what it is today – one of the finest paper mills in the world, known for quality, service and innovation.”