The announcement of the sale of NewPage Holdings Inc. to Verso Paper on Monday has given people in the industry and associated parties hope that a stronger paper company will emerge.
Verso Paper plans to buy NewPage’s seven mills in the United States, including the Rumford mill, for $1.4 billion. The deal, subject to regulatory approval, is expected to close during the second half of this year. Verso owns four mills, including Jay and Bucksport in Maine.
A Verso spokesman said there is no plan to close any mills.
“Jay is very concerned about the health of the paper industry and sincerely desires that this is a positive step forward in stabilizing the market so that we can continue to have the paper industry prosper and continue to employ the skilled workforce,” Jay Town Manager Ruth Cushman said. “Our community depends on Verso, and we will be anxious to see the impact to the Jay mill from the acquisition.”
Ron Hemingway, president of the Local 900 United Steelworkers at the Rumford mill, said he recently met with NewPage, and while he said he didn’t receive a lot of long-term answers, he’s hopeful for the future of the company in light of the layoff announcements a few months ago.
NewPage announced in November that it would shut down a paper machine “indefinitely” at the Rumford mill in mid-February because of tough economic conditions.
Approximately 120 workers would be laid off, Hemingway said then. The mill employs 830 people, of which about 650 are represented by the union.
Rumford mill spokesman Tony Lyons said any decision on layoffs made prior to Monday’s announcement of the sale will go on.
“We’re expecting the approval process to take somewhere between six and nine months, and will continue to operate as an independent company in the meantime,” Lyons said. “Any decision we’ve made prior to that will continue as planned,” he said.
“We’re hoping that Verso could step in and make things better, or at least recognize that Rumford has a good mill with some hard workers,” Hemingway said. “We’re also being realistic. Things might not necessarily get better, but we’re still hopeful.”
Hemingway said he also heard the same thing that Lyons said about the layoffs.
However, with a new company at the helm, Hemingway said, “We have the chance to show Verso that we’re the best papermakers around.”
Verso’s acquisition of NewPage should make their company stronger and more financially secure, John Williams, president of Maine Pulp & Paper Association, said.
“Two of the four mills that Verso currently owns are in Maine, so they are very familiar with the state and appreciate our strong papermaking history. All of this should be positive for the industry in Maine.”
According to the Bangor Daily News, the combined company would employ approximately 2,300 people at its three Maine mills. Memphis, Tenn.-based Verso employs roughly 1,500 at its paper mills in Jay and Bucksport.
Williams said he does not know what the acquisition means for the workers or the three mills that Verso will own in Maine.
“I am sure that they will be looking at all of the mills now owned by Verso and NewPage to see if there can be some consolidation. Jay, Rumford and Bucksport are all strong, well-run facilities, so I hope that they will continue to operate without any reductions in staff or machines, but they will have to compete with other mills in the Verso/NewPage system.”
One thing that is important to note, Hemingway said, is that NewPage employees have a successor clause in their contract, which states that in the case of another company buying out NewPage, that company would have to recognize the terms of their old contracts.
“Sometimes, it gets really messy in those situations, where the new group will fire old employees and start over, but Verso said they would be recognizing that clause,” Hemingway said. “I think that provides a lot of security for the NewPage workers
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