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Management Side
Former Nippon Facility to be Shut Down for up to 18 Months

Port Angeles, Washington, USA 10 April 2017 -- (From the Peninsula Daily News) -- McKinley Paper Co. officials are settling in as new owners of the nearly dormant Nippon Paper Industries USA facility in preparation for shutting it down within the next two weeks for up to 18 months.

Cathy Price, human resources manager for Nippon and now McKinley, said last week the sale of the Ediz Hook facility to McKinley closed March 31.

"That was the last working day for a lot of our folks," she said.

The sale price to McKinley, the American subsidiary of the Mexican paper giant Bio Pappel, was $20.6 million, according to Clallam County Auditor's Office and Treasurer's Office records.

The state Department of Revenue had valued Nippon at $17 million in 2016 based on income.

Price said the next-to-last round of permanent employee layoffs by Nippon at what's now McKinley was March 31, the same day the sale closed.

McKinley, based in New Mexico, took control of the assets April 1, making the mill its second paper facility in the U.S.

Price said the final nine layoffs are expected by April 17, when the $91 million biomass cogeneration plant is fully decommissioned. The cogeneration plant was built to help save Nippon by generating electricity for sale and steam for the plant.

The purchase and sale agreement with McKinley had been announced March 2, when Nippon attributed it to "a severe business environment due to diminishing demand for its product."

Herb Baez, McKinley vice president, and Isaac Rosas, McKinley's general manager, have been spending a few days a week at the facility over the past several weeks, Price said.

With the sale complete, the mill is being fenced off to ward off intruders, a problem in recent weeks, Price said.

The mill will not be producing paper or electricity for 12 to 18 months while it is retooled to manufacture liner paper for cardboard boxes, McKinley's major product, Price said.

Price speculated that McKinley could begin recruiting workers for the reopened mill late this year or early 2018.

Nippon manufactured lightweight paper such as newspaper stock and telephone-book paper.

One of the mill's two paper machines had been turned off since December 2015 by the time production was severely curtailed in January.

Whether that second machine will be started up again when the mill reopens is dependent on the paper market, Price said.

Nippon said 151 employees would be permanently laid off as part of its mandatory federal Worker Adjustment and Retraining Notification notice.

Some employees such as Price and mill Manager Steve Johnson were asked to stay on.

Price said yes to McKinley's offer, and Johnson said no March 31, Price said.

"NPIUSA offered or gave the laid-off employees generous separation packages," she added, declining to elaborate.

There also has been a recent increase in retirement notices, Price added.

McKinley assumed the union contract with all its terms and conditions as part of the sale, she said.

Among those left without a job was mechanic-millwright Virgil Hutt, 50, of Port Angeles, a former member of the Western Pulp and Paper Workers Local 153 bargaining board.

Workers found out they were laid off by Nippon by looking at a work schedule that came out a week in advance.

"They were just left off the schedule," Hutt said.

Hutt, who said he is single, was among the more than 100 hourly employees who were paid between about $15 and $30 an hour.

"People are kind of letting the dust settle a little bit," he added.

"The next move is for me, personally, to start looking for work and maybe pursue training."

Laid-off workers are eligible for up to six months of basic unemployment and can apply for an extension, said Margaret Hess of Bremerton-based Olympic Area Worksource, covering Clallam, Jefferson and Kitsap counties.

The program is a partnership of state and community agencies that provides employment and training services.

Hess said 39 former Nippon workers are enrolled in the federal Trade Act and Dislocated Worker programs and the state worker retraining program.

Peninsula College is a partner in the effort, Hess said.

The Trade Act funds up to two years of training.

"It is a significant layoff in terms of impact on families and the community in general," Hess said.

The mill was built in 1920 as Washington Pulp &Paper Co., then carried the name Crown Zellerbach. Daishowa Paper of Japan purchased it from James River in 1988.

In 2003, Daishowa merged with Nippon Paper Group, and it became Nippon Paper Industries USA.

Now it's McKinley Paper Co. Washington Mill.


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