PORT ANGELES — The indefinite shutdown of one of two Nippon Paper Industries USA paper-making machines will lead to the layoff of 21 to 28 hourly employees, a union official said.
The machine was shut down Friday because of economic conditions.
The shutdown also will lead to the loss of $360,000 a year in utility tax revenue to the city from Nippon, the city’s largest electric utility customer, City Manager Dan McKeen said in a memo Tuesday to city employees and City Council members.
Nippon’s announcement will require revisions to the city’s 2015 general fund budget, McKeen said in his memo.
All general-fund vacancies will be put on hold until a “thorough review” is conducted, while 2015 capital projects will be delayed “until further review,” McKeen said.
Mill Manager Steve Johnson confirmed Tuesday that there will be layoffs but would not disclose the number.
The paper machine has to be shut down “to balance capacity with the current economic climate and slow sales of uncoated mechanical papers,” Johnson said in statement to the Peninsula Daily News late Monday afternoon.
Darrel Reetz, vice president of the Association of Western Pulp & Paper Workers Local 155, said Tuesday layoffs of the 21 to 28 hourly employees were expected to begin next Monday with the departure of about a dozen workers.
“A lot of those guys won’t be coming back,” he said.
Union officials will be working in conjunction with the local’s Portland, Ore., office “to see what we can do for retraining some of them,”
Reetz said. “This has been rumored for at least a month.”
Notified late Monday
Employees at the Ediz Hook plant west of downtown were notified late Monday afternoon of the curtailment in operations.
Reetz said there are about 140 hourly workers at the plant.
He did not know how many management employees will be affected.
Reetz said officials from the union’s Portland office will meet Wednesday with company officials and members of Local 155.
Company officials are working closely with the Association of Western Pulp and Paper Workers and city officials “to identify and minimize impacts of this curtailment,” Johnson said.
“In spite of the doomsayers, we are fighting to survive,” he said. “It’s the same thing I told the employees. We’ve got to focus on what we do and do it right.”
The paper machine will be restarted “when the economic conditions improve enough to justify resumption of operations,” Johnson said in the statement.
The company’s remaining No. 3 paper machine, the existing cogeneration plant and other operations “will remain in full operation,” Johnson said.
The mill’s two paper machines were built in 1920 and 1928, Johnson said.
Nippon manufactures paper for telephone books and newsprint for newspapers such as the Peninsula Daily News.
Declining demand
Johnson would not comment on the company’s strategy for making up for consumers’ declining use of printed material of the kind produced by Nippon.
“We are working on that to determine our own future or strategy and what grades we are going to make and how we are going to make them,” Johnson said.
He acknowledged that changes must be made but said the plant would continue to produce paper.
“It’s not what we make today, but it will be paper nonetheless,” Johnson said.
“A lot of it depends on how well we execute our strategy and grow the other grades. I hope we restart [the paper machine] in a market different than today but that there’s volume and demand, and I guess I will just leave it at that.”
Nippon’s announcement follows on the heels of Green Creek Wood Products LLC’s closure of its Port Angeles sawmill Nov. 1, laying off 35 people.
That was preceded by Interfor’s announcement in July that its Beaver sawmill and Forks planer mill would be shutting down.
“We ask that each of you think about the families affected by the closure of the mill’s paper machine and to keep them in your thoughts and prayers as we go into the holiday season,” McKeen said in his memo.
________
Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 5060, or at pgottlieb@peninsuladailynews.com.
