IP to shut down machine

Published 9:36 am Thursday, November 13, 2008

International Paper Co. today said it will shut down one of its production processes at the Franklin mill, affecting 50 jobs there.

The closing, which will begin Nov. 23, will displace 50 of the mill’s 1,200 employees, according to Desmond Stills, the mill’s communications manager.

“We will be working to place these employees in other positions in the paper mill,” Stills said. “The outcome of that work is yet to be determined. It will include bargaining with the unions that represent those employees.”

The news spread rapidly through the community.

“It seems to be a sign of the times,” said Teresa Beale, executive director of the Franklin-Southampton Area Chamber of Commerce.

Beale said she is sure the community will rally for workers who are displaced.

“We’ve just need to stick together and help each other get through these hard times,” she said.

The permanent shutdown of the No. 3 uncoated freesheet paper machine will reduce the company’s annual paper production capacity by approximately 150,000 tons of uncoated freesheet papers, down from its usual annual 900,000 tons.

That particular machine is used to make paper for envelopes, Stills said.

The shutdown was due to a decline in uncoated freesheeted paper machine demand, company officials said.

“Our company’s commitment to optimize our mill operations to meet the needs of our customers made this difficult business decision necessary,” said Wayne Brafford, IP’s senior vice president of printing and communications papers. The additional capacity reductions, as lack of order downtime, reflect the current economic weakness in our markets.

“We also understand this announcement will create uncertainty for employees, their families and the communities affected, especially in the Franklin area,” Brafford continued. “We will do all we can to assist them during the shutdown process and downtime period.”

John Smolak, president of Franklin Southampton Economic Development, said from a business standpoint that the move was understandable, especially in this difficult economy.

On Wednesday, IP shares hit a new 52-week low, dropping 12.88 percent to close at $11.77 a share. The stock rallied on Thursday to end at $13.77.

“These types of decisions have to be made and are going to be made,” Smolak said about the shutdown. “I guess what’s a little disheartening is that they put the word ‘permanent’ in front of the word ‘closure.’ Hopefully, these workers will be able to find productive positions within the mill.”

Mayor Jim Councill, said he was saddened to hear about the machine closure.

“I was sadly surprised when I was told about it this morning,” Councill said. “I’m anxious for the 50 employees. They’re just great employees they have down there.”

He added that he was hopeful about the employees finding new positions in the mill and “thought it was a good sign” the mill was willing to work with employees.

“It’s a sad thing though, especially with the mill and its employees being such a quality thing for Franklin,” he said.