Manufacture This

The blog of the Alliance for American Manufacturing

The Verso Paper Mill falls victim to an unfair market for American workers.

Jay Whitmore was employed at the Verso Paper Mill for 22 years, working his way up from the mill floor to meter engineer controlling the flows of all virgin fiber and chemicals used on the paper making machines.

Located in the quaint seaside town of Bucksport, Maine, the Verso Paper Mill began in 1930 as the Maine Seaboard Paper Co., described by the Ellsworth American newspaper as “gigantic” and “one of the greatest industrial projects undertaken in the New England states in years.” As recently as the 1980s, the mill employed more than 1,350 workers. At that time, it was the largest employer in Bucksport, a city of about 5,000 residents located at the head of Penobscot Bay.

Jay Whitmore

Working at the mill provided a substantial living for Whitmore and his colleagues. The 46-year-old recalls a time when it was commonplace to see two or three new cars in the mill parking lot, and the money earned by the workers at the mill supported businesses in the rest of the town.

But that all changed in December 2014, when the Verso Paper Mill shut down after 84 years of operations, displacing its remaining 570 workers.

“Families were in that mill,” Whitmore said. “It wasn’t just individuals, it was families, fathers and sons, daughters. They were maybe two or three generations sometimes. This is the work the people know where they can make a decent living. Now it’s all gone.”

The unemployment rate in Bucksport spiked to 11.7 percent after the mill closed in December, an increase of 4.2 percent and well above the national average of 5.4 percent. To ward off cuts to public services and maintain school standards, Bucksport is considering an increase in the millage rate of an extra $1,000 dollars per $100,000 of a homeowner’s house appraisal. The Verso paper mill had provided 47 percent of the tax revenue in Bucksport.

Verso is just one of several now-shuttered mills in the once-thriving paper and pulp industry in Maine, which at its peak employed more than 18,000 people in the Pine Tree State. When it ceased operations, Verso was the third mill to permanently close in Maine in 2014. By 2020, the number of mill workers is expected to decrease to 5,200, according to the Labor Department.

There are many reasons for the decline of U.S. paper mills. Paper is used less frequently with the dawn of the computer age. Newspapers seem to be a thing of the past. If you’ve picked up a magazine lately, with a few exceptions, you’ve probably noticed they are a shadow of their former bulk. Whether it’s coated or uncoated paper products, the industry has taken a major hit.

But a chief reason for the paper industry’s struggles lies with foreign predatory practices.

An Unfair Market for American Workers

Most industrialized countries throughout the world produce government-subsidized paper products and sell them in the American market, and U.S. paper businesses struggle to compete on such an un-level playing field.

A government subsidized paper mill in Nova Scotia, Canada, for example, has had a devastating effect on the Maine paper industry by siphoning away American-made paper contracts by offering much lower prices. The Canadian mill is a former New Page Corp. facility in Port Hawkesbury, Nova Scotia that makes grades of magazine and catalog paper similar to the paper that was produced at the Verso Paper Corp. mill in Bucksport and Madison Paper Industries in Madison, Maine.

New Page closed its unprofitable mill last September, but shortly thereafter, British Columbia-based Pacific West Commercial Corp. snapped it up and, with an infusion of $125 million from the province of Nova Scotia, began acquiring magazine-quality paper business from Maine paper mills – like the one in Bucksport.

“Anytime you put more paper into a market that’s oversupplied, it’s a threat,” said John Williams, president of the Maine Pulp and Paper Association.

Unfair imports of uncoated paper products from companies based in China, India, and Brazil are also forcing many American mills to shut down. Since 2000, approximately 126 paper mills in the U.S. have ceased operations and 223,000 well-paid Americans have lost their jobs, according to the Center for Paper Business and Industry Studies at Georgia Tech University. The Los Angeles Times reports that about one third of the domestic paper industries workforce has been lost.

But American paper manufacturers are fighting back. Four domestic paper production companies joined the United Steelworkers (USW), which represents paper workers, to file several trade cases seeking remedy for unfair trade practices. And they’re making progress — the International Trade Commission (ITC) in March issued a preliminary ruling in favor of violations by uncoated paper imports from China, Australia, Brazil, Indonesia, and Portugal.

The affirmative vote by the ITC means there is evidence that imports are threatening injury to the American paper industry. The ITC is now investigating the USW and paper company’s petitions to establish if duties on the unfairly traded imports of uncoated paper products is justified.

About 130,000 workers are still represented by the USW in the paper and forestry products industry, but there has been a loss of more than 60,000 additional jobs since 2005.

And although business and labor are banding together to fight back against unfair trade, they face an uphill battle. Combating illegal imports is a long, drawn-out process, which involves appealing to both the Commerce Department and the ITC. If a harmful burden of proof is affirmed by the ITC, it often takes nine months to a year before countervailing duties are imposed.

“I have to get through school myself and after that find a job. By the time I get my associate degree in two years, I’ll be 52. Am I going to get hired? What are people going to think? Are they going to take a chance on somebody my age? There is a good chance we could lose our house.” Tammy Marston, former Verso Paper Mill employee

In the meantime, factories are idled or shut down and thousands of American workers lose their jobs.

“Since 2011, eight U.S. mills that produced uncoated paper have been forced to close in the face of increasingly unfairly traded imports, resulting in the loss of thousands of paper jobs,” said USW International President Leo Gerard. “Foreign predatory practices targeting America’s producers and workers, including tens of thousands of our members, are the root cause of production declines and job losses.”

The Verso Paper Mill surely felt the effects of a dwindling U.S. paper industry when it shut down in December, a sad ending to a proud history.

It operated as the Maine Seaboard Paper Co. until 1946, when it was purchased by Time Inc., which hired St. Regis Paper Co. to operate it. In 1984, St. Regis merged with Champion International Corp., but Time Inc. remained a large customer for magazine-coated paper. Other companies using Bucksport-made paper included Good Housekeeping, Victoria’s Secret, and L.L. Bean.

In 2000, International Paper, America’s largest paper producer, acquired the Bucksport mill from Champion. Six years later, International Paper decided to spin off its coated-paper division and Verso Paper Corp. was born.

Verso converted its No. 1 paper machine in Bucksport to manufacturing lightweight specialty papers, including the production of the yellow-colored packets used for the artificial sweetener Splenda.

But by 2011, the effects of a disappearing U.S. paper market brought on by inexpensive imports and less overall demand began to take its toll on the historic Bucksport mill. The workforce had shrunk to 700 employees, and an additional 15 percent were laid off.

The final nail in the coffin came on Oct. 1, 2014, when the company announced plans to shutter the mill entirely, leaving its remaining 570 employees without jobs during the holiday season.

“The paper mill closing has had a mass ripple effect,” said Whitmore, the mill worker. “On the day they announced it, we had chemical companies that were affected. Railroads. The railroad hasn’t run to Bucksport since the mill shut down in December.

“We had a real bad winter and people are finally getting out and about. It’s just been doom and gloom with snow and rain. People are just finally considering what they are going to do. People here were living week-by-week on their paychecks. Even though they were making good money, they had a lot of people depending on them.”

Looking to the Future

Whitmore is currently employed by the Eastern Maine Development Corp., helping other laid-off Verso workers obtain retraining assistance and the federal government’s Alternative Trade Adjustment Assistance. The program allows former employees to return to school and learn a new trade while continuing to collect their unemployment insurance.

“Our mill was very old and our average age was 55-plus for the whole mill,” Whitmore said. “I mean, we had people in there for 30-plus years. So we had a lot of people that were just a couple of years from retirement when the mill shut down. It was, ‘O.K., let’s step into the next step.’ But they are used to making $60,000 to $70,000 a year, and with unemployment you’re taking home $320 a week after taxes. There is a lot of people right now just trying to figure out their path.

“The community has come together. The Seaport Federal Credit Union has worked great with us in car payments, and if you wanted to try and refinance mortgages to lower your payment so you can get by month-to-month, they worked with us.

“It wasn’t uncommon when you went into that mill parking lot to see two or three new plates on new vehicles. Somebody was always getting something new. But now, it’s going to be a ripple effect. We’re not going out there to get those new vehicles. The grocery store is not going to be as packed on a Thursday – payday – as it used to be. The Irving Oil gas and convenience store and the Dunkin Donuts aren’t going to be getting the business they got, because you had so many people – the hundreds and hundreds of people – passing through at 5 o’clock in the morning getting the scratch tickets and newspaper.”

Some Bucksport residents had hoped another paper company would purchase the Verso mill and restart production. But those dreams were quashed when a Canadian firm, American Iron & Metal (AIM), purchased the 250-acre property. AIM is a Montreal-based scrap metal dealer that has begun the process of disassembling the mill, piece-by-piece. An auction was held in March to sell off the remaining mill equipment that was not bolted down. As for the paper-making machines, they’ve been running 24/7 for 80 years, and their lifespan may have come to an end.

At this point, the residents of Bucksport are hoping for a redevelopment of the Bucksport mill property. With its beautiful location on the Penobscot Bay, the site could emerge as an entertainment center and create additional jobs for the community.

But Whitmore can’t wait for that possibility. He has decided to return to school to take part in a one-year HVAC course being offered by the state of Maine at Eastern Maine Community College.

“While I am going to school I will still be able to collect unemployment. I mean, it’s kind of a financial burden. Talking with my wife, it’s like, ‘Hey, can we make it on this with all our payments and bills?’ Luckily my wife works, so I am under her insurance. But a single fellow with a house payment for something like that, you’ve really got to look long-term when you are trying to make a decision like this," he said.

The closing of the Verso Paper Mill in Bucksport hit close to home for the Alliance for American Manufacturing (AAM) family. AAM Northeast field coordinator Linda Murch was born and raised in Bucksport, and working at the mill was practically the family business.

“I started at the mill in 1999 doing what were non-traditional jobs for women,” said Murch. “Being hired at the mill meant access to the highest paying jobs available in my area that did not require post-secondary education or training. The pay scale and the benefits were well above average.”

Working in the mill brought both of Murch’s parents’ families to Bucksport. Her stepfather moved to town to work construction on the mill and her mother’s grandfather came to work in the wood yard. Her father had worked at the mill for more than 40 years, her brother recently retired after 40 years of paper-making, and her sister was still on the job after 30 years when the mill closed in December.

“For many years, the mill meant stability and jobs for those in the community – they were the largest employer in the county," Murch said. "The mill supported the local schools in their activities, civic groups, the United Way. After the mill was sold to large corporations – that were not interested in making paper but in selling off assets and increasing their profits by changing the formula that had been successful for so many years – we saw a lot of changes. There was no community involvement.

“Small businesses that traditionally support mills, the businesses where millworkers spend their money are affected and also face closure and reductions.”

 A tireless advocate for AAM, Murch knows there are things that can be done to level the business playing field and reclaim American middle-class manufacturing jobs.

“We need to focus on policies that encourage manufacturing and enforce the rules we have in our trade agreements, for example, by taking action to end currency manipulation. When new agreements are formed, they need to make sure they are not adversely affecting American workers and U.S. manufacturing companies. The state should also work to provide workforce education.”

One former Verso Paper Mill worker who is among a large group of displaced workers seeking workforce education is Tammy Marston. She was laid off in December after having worked eight years at the paper-making facility. She is currently enrolled in school studying business administration with a concentration in accounting.

“It’s going to be a lot of studying and a lot of stress because living on $378 – before taxes – for unemployment is not very much,” Marston said. “I have to get through school myself and after that find a job. By the time I get my associate degree in two years, I’ll be 52. Am I going to get hired? What are people going to think? Are they going to take a chance on somebody my age? There is a good chance we could lose our house.”

Marston got started in the mill when she met her boyfriend who worked maintenance at the mill’s power plant.

“I met him and we moved in together,” Marston said. “I was working in the health care field and I was making $12 an hour, and I had a chance to go to work at the mill with him and you get paid $18 an hour to start out.”

Marston plans to finish school and start her own business. “That way I don’t have to worry about foreign competition. Start my own business, make my own hours, and do my own thing,” she says.

That seems to be the attitude in Bucksport these days, according to Murch.

“There still is a little bit of anger, but people are looking to move forward and get on with their lives,” she said. “They are looking for new opportunities and hoping to return Bucksport to the thriving town it once was.”

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