Although the iconic steam stack isn’t running and many Flambeau River Papers workers have found themselves in the unemployment line over the last week, there is yet a cautious optimism that the Park Falls paper mill will reopen.
After FRP announced it would enter receivership as an alternative to bankruptcy May 7, it notified the Department of Workforce Development it expected to layoff 65 workers by July 8. But the layoffs and paper machine shutdowns occurred a month earlier than expected, when a key customer — believed to be CellMark Paper, based on court records — did not make its regular payment June 5, according to the court-appointed trustee of the business, Rebecca DeMarb. The missed payment led to the mill shutting down its two operating paper machines and calling off most workers around June 7.
Since that time, DeMarb, of the Madison law firm DeMarb-Brophy LLC, has been working with other key stakeholders in earnest to sell and reopen the mill.
“I can tell you that we have been working intensely, around the clock, on agreements with the many stakeholders that will allow us to reopen the mill within the coming weeks,” DeMarb said in an email Tuesday. “We are cautiously optimistic, but we do not have the agreements completed. We do have an agreement in principle with the key customer, which was the biggest hurdle. We are working this week on getting supporting agreements with the remaining stakeholders so that we can announce the timing of the mill reopening.”
While the majority of the 187 FRP employees have been without work, a skeleton crew has been operating at the mill around the clock to ensure the plant can reopen the minute it has the go ahead.
John Tapplin, president of Local 2-0445 of the United Steel Workers union said Monday that while the paper machines themselves are shut down, the processes and products that feed the machines all need to be maintained and cleaned up correctly so the mill can operate again.
“What we’re trying to do is shut the place down so that if somebody buys it all we have to do is fill up a tank and push a button,” said Tapplin. “A paper machine isn’t meant to be shut down.”
Tapplin, who has been at the mill since 1977, said that besides 2006, this is the only full shutdown the mill has had since there was a short lockout in 1971.
The 2006 closure lasted almost five months, when Ohio-based Smart Papers, which owned the plant for just over a year, announced it was closing the pulp and paper mill and filing for bankruptcy, according to Park Falls Herald reporting. At that time the mill employed 300 people. Smart Papers cited the high costs of energy, deterioration of market conditions, and loss of investment capital as reasons for the closure.
In June that year, Butch Johnson, who sold wood products to Smart Papers, announced plans to purchase the mill for $19 million in bankruptcy court. Johnson accumulated $15 million in private funds, half of which he told Herald reporters he contributed himself, and another $4 million in state loans. On Aug. 7, 2006, the mill officially reopened as Flambeau River Papers.
Similar to 2006, the current abrupt closure may be a violation of Wisconsin’s Business Closing and Mass Layoff law, which requires a 60-day notice of mass layoff or plant closure. The law is administered by the Department of Workforce Development and designed to give employees, their families, and local communities notification ahead of closings and layoffs.
According to partial DWD records from 2006, the state found Smart Papers in violation of plant closure warnings when the mill abruptly closed and issued an order for a $2 million payment to recoup lost compensation for 300 employees following its investigation. In 2007, DWD collected and dispersed to employees just over $400,000, the amount reached in a settlement.
For now, though, Tapplin and other workers remain hopeful a buyer can be found quickly. The veteran machine tender said he knows there are other paper companies looking at the mill, as well as at least one investment firm.
“I’ve seen it worse than this before, so I’ve got to stay positive,” Tapplin said, adding that he knows a few other paper companies have been looking at the plant, as well as at least one investment firm. “Hopefully one of them is going to say ‘yeah, we can make this work.’”