A day after Verso Paper Corp. announced plans to close its mill in Bucksport, Maine’s three gubernatorial candidates seized the opportunity to take potshots at their opponents’ approaches to job creation and retention.
Meanwhile, Verso officials said they tried everything to keep the mill open, and that the closure should not have surprised anyone because the Bucksport facility had been losing money for years.
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U.S. Rep. Mike Michaud, Democratic challenger to Republican Gov. Paul LePage, held a news conference Thursday in Brewer to promote his ideas for preserving the state’s paper industry. He also slammed LePage for what Michaud described as a failure to address the industry’s ongoing problems.
“All the governor wants to talk about is welfare and immigration,” said Michaud, who represents Maine’s 2nd Congressional District, where the mill is located.
Michaud, a former mill worker, said he reached out to LePage when the Great Northern Paper mill in East Millinocket closed in late January to talk about helping the state’s paper industry, but got no response.
Michaud accused LePage of refusing to work with others on solutions, and asserted that his lack of planning has hurt Maine’s most vulnerable local economies.
“He’s done nothing to develop a plan for economic development in rural Maine,” Michaud said, while offering his own six-point plan to preserve jobs, including those in the paper industry.
LePage fired back that Michaud’s “Monday morning quarterbacking is ridiculous. … If he has a crystal ball then I’d like to borrow it.”
Speaking at a news conference in Holden, LePage said he intends to mobilize the state’s labor resources to help the mill’s roughly 500 displaced workers find jobs, and has already reached out to potential buyers of the Bucksport mill.
He conceded that the mill’s technology is old, but said a new product mix might bring it to profitability under another owner.
“We have to see if we can do something in markets that aren’t shrinking,” such as tissue and cardboard, LePage said. The Bucksport mill makes glossy paper used in magazines, along with various specialty papers.
Independent candidate Eliot Cutler also didn’t let the opportunity pass to make political hay. In a telephone interview Thursday, Cutler said he wasn’t assigning blame for the mill shutdown but was frustrated that his rivals had reacted as if they couldn’t see it coming.
“What galls me as much as anything … is we have two guys who seem to be surprised when everything that’s bad happens,” Cutler said. “They’re two guys who either failed to see around the corner, or who are unable to see around the corner.”
Cutler said Michaud and LePage should have been on alert since the January announcement of a proposed merger between Verso and rival NewPage Corp., which some analysts speculated would lead to a mill closure.
He said the mill’s troubles were rooted in plummeting worldwide demand for its paper products. Cutler said neither of his rivals had done anything about it.
Asked whether he thought the Verso mill could land a new investor, he said, “I don’t know. I don’t know whether either of these guys is competent and sophisticated enough to go find one.”
The news that Bucksport’s biggest employer for 85 years is closing Dec. 1 rocked the small coastal community. Besides the 500 direct jobs at the mill, there are hundreds more in the mill’s supply chain and in businesses that rely on the spending of its workforce. The mill provides about 44 percent of the Hancock County town’s tax base.
Verso officials on Thursday attributed the closure decision to a combination of factors, but singled out shrinking demand for the types of paper produced in Bucksport, along with volatile energy prices caused, in part, by regional shortages of natural gas. High energy prices prompted the Bucksport mill to shut down for most of January and February.
Robert Mundy, senior vice president and chief financial officer at the Memphis-based company, said managers attempted to diversify the mill’s product line in recent years. But Mundy repeated Thursday that the Bucksport facility “hasn’t been profitable for a number of years.”
“Everyone knows that we have been looking around at different opportunities and trying different things during the past several years,” Mundy said in a phone interview. “And everyone understands the climate for our products. … We tried everything possible to make a go of it. But unfortunately, we reached a point where we can’t come up with a solution.”
The company expects to spend between $30 million and $35 million on severance costs and between $5 million and $10 million on shutdown costs. In its second-quarter filing, it reported losses of $43 million, with a drop in net sales to $320.9 million from $330.4 million during the same quarter last year. Over the same period, the company reported that coated-paper sales declined to $225.4 million from $253.1 million, while pulp sales increased to $49.7 million from $39.1 million.
Verso has been attempting since January to acquire rival paper manufacturer NewPage, which owns the mill in Rumford as well as seven others around the country. The $1.4 billion acquisition, which must be approved by federal regulators, would yield the largest glossy paper producer in North America.
But the proposal has raised antitrust concerns because the merged company would control more than 50 percent of the glossy paper market in North America.
Verso’s Mundy said Wednesday that “there is no connection between the announcement at Bucksport and the merger.”
“The two events are totally unrelated,” he said.
Staff Writer Steve Mistler contributed to this report.
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