News & Updates Trouble and Hope in Northern Maine Northern Sky News, May 2003 The bankruptcy of Great Northern Paper Company (GNP) in January has dealt a body blow to the economy and morale of northern Maine. GNP’s parent, Inexcon, has been forced out of management. An interim triumvirate of former GNP executives has been installed to prepare the company for a sale. Nearly $13 million in loans have been secured from Boeing Capital Corp. to keep the mills warm. And a plan has been pieced together to salvage the company from dismemberment with the hope that a sale of GNP to Fraser Papers’ Canadian parent, Brascan Corp., will be finalized by May. However, the reality of the Great Northern Paper bankruptcy is hitting hard locally. Whether or not GNP is sold and its mills restarted, experts predict that there will be massive layoffs, reductions in benefits for employees, and municipal budget cuts because the company has not been paying its tax bills. The schools and health care facilities are starting to feel the pinch. For instance, East Millinocket has cut $172,000 from its school budget and may close its high school. The local hospital is suffering as well since Great Northern has been trying to cut off health care payments for retirees. According to the Katahdin Times , Millinocket town council chair Don McLaughlin says, "The town is in dire straits." Yet the struggles of the forest products industry in Maine reach well beyond the Katahdin region. There has been an avalanche of closings and downsizings. The Lewiston Sun Journal reports that Maine forest industry employment hit a new low last November, only 11,800 workers. That is down 31% from a decade ago and it does not count the 1,100 papermakers who are out of work because of the Great Northern bankruptcy and a spate of other recent closings. Signs of trouble are widespread. Just since the beginning of this year: o According to the Northern Logger, "As the year 2003 dawns on the forest products industry landscape in the Northeast and Lake States, one can’t help but be reminded of a scene out of one of Hollywood’s big budget disaster movies." o Georgia-Pacific has permanently shut down tissue production at its Old ,Town mill because of a global overcapacity of paper production, the ,mill’s geographic location, and the high cost of energy and raw materials. Half of the plant’s 600 workers are now unemployed. o Fraser Papers Inc. will cut 331 jobs at the company’s mills in Madawaska, ME, and Edmundston, NB for productivity improvement. Nearly 200 of the jobs eliminated will be in Maine. o Of the remaining 14 pulp and papermills in Maine, several others besides Great Northern, including Lincoln Pulp & Paper in Lincoln and Eastern Fine Paper in Brewer, have been operating under Chapter 11 bankruptcy. Lincoln and Eastern have cut their workforce 15% since 2000. o Saunders Brothers has closed its hardwood plant in Westbrook, which had been open for more than a century, and another mill in Rumford. It is consolidating operations in Greenwood. o H.G. Winter & Sons has closed its wood mill in Kingfield, bringing to an end operations at the site which started in 1885. o Solon Manufacturing laid off about 30 of its 120 workers in January at its Solon and Skowhegan plants. o Maine Wood Turning in New Vineyard has cut its workforce nearly in half and Fletcher’s wood products in the same town has cut back its work week to about 30 hours. o The American Tissue mill in Augusta has been closed since August 2001 while the company is in bankruptcy. It owes millions of dollars to scores of creditors, including $362,000 to the City of Augusta for back taxes. o Forster Inc. will close its plant in Strong on June 1 putting a lot people out of work and representing a loss of more than $100,000 in local property taxes. The company dates back to the mid-1800s. o The 108-year-old Sherman Lumber Company was sold piece by piece at auction after Katahdin Trust Company foreclosed on its mortgage. One local resident said, "We’ve lost everything we had in town." The mill had closed in 1999. At its peak Sherman Lumber employed over a hundred people. o C.B. Cummings & Sons has closed it dowel plant in Norway and auctioned its equipment. Five years ago the company had 200 employees and annual sales exceeding $7 million. o Other Maine forestry companies that have recently folded include Cornwall Wood Products, Houlton International, Kendall Dowel Mill, and Bickford Woodworking. The economy of northern Maine urgently needs to be diversified. One bold idea that could move Maine toward a better-balanced economic base is a national park. A recent report by a national expert, Dr. Thomas M. Power, concluded: "We have analyzed some of the key issues related to the economic impacts of creating a new Maine Woods National Park and Preserve and concluded that such an action could have a net positive impact on northern Maine and the state as a whole....The most cautious and open-minded course would be to conduct a full, independent feasibility study in order to evaluate this possibility. A full feasibility study could analyze in detail the full range of costs and benefits, leaving Maine’s residents better situated to evaluate the alternative public policies available to stabilize and renew the communities and economics of northern Maine." Yet state and federal policymakers have consistently expressed skepticism to even studying the potential benefits and costs of the proposed park. If ever there was a time to diversify northern Maine's economy, it is now. For a copy of The Economic Impacts of the Proposed Maine Woods National Park and Preserve by Dr. T.M. Power, see www.restore.org or contact RESTORE: The North Woods at 9 Union Street, Hallowell, ME 04347. Jym St. Pierre is Maine Director of RESTORE: The North Woods. Back to Maine Woods National Park News & Updates