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Management Side
Technical Side
Madison Paper President: Production Schedule Could Change Weekly
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MAINE 02 February 2016 -- (From the Morning Sentinel) -- The president and CEO of Madison Paper Industries said Tuesday he can't confirm the details of a potential months-long curtailment at the paper mill, saying only that while production at the mill is down, the situation is changing on a weekly basis and layoffs have been avoided.

Meanwhile, the president of the union representing employees at the mill said schedule changes enacted after the curtailment are frustrating workers with less pay.

Russ Drechsel, president and CEO of Madison Paper Industries, said the mill's production schedule is now subject to change on a weekly basis. The mill employs about 225 people.

"We'll balance our production needs with what the market demands," Drechsel said. "In other words, an order or request for paper could come in tomorrow, and we may elect to run this weekend. Or we may have 10 orders canceled, and we may have to shut down all next week.

"It's a fluid situation. That's the best I can say right now."

Michael Croteau, president of the United Steelworkers Local 36, the union at Madison Paper, said in January that the mill had just begun a two-day-per-week curtailment that was expected to last three to six months. The production cutback has come amid a drop in demand for supercalendered paper - the type of glossy magazine paper made at Madison Paper, according to both officials.

Croteau said Tuesday that since the end of January, the mill has continued to operate on a Tuesday-through-Saturday schedule. That change has been frustrating for employees, many of whom lost pay and have had to make changes in their personal lives to accommodate the schedule changes, he said.

"We're still working with the company to try and find other schedules that aren't so frustrating for my membership," Croteau said. "My membership is very frustrated with this type of schedule along with the loss in pay."

The production change comes shortly after the U.S. Commerce Department, at the request of Madison Paper and Verso Corp., approved the placement of duties on supercalendered paper being imported into the U.S. from Canada.

Drechsel has said he was prohibited from commenting on production at the Madison mill in January because of the company's publicly traded status, which legally prevents officials from making statements before the release of quarterly financial information.

The 2015 financial statement for parent company UPM released Feb. 2 shows that 2015 companywide sales were up 3 percent from 2014, although paper sales in Europe and North America were down.

According to Drechsel, demand for supercalendered paper dropped 10 percent from 2014 to 2015. He said the recently approved duties on supercalendered paper being imported from Canada have had little effect so far on Madison Paper, because the devaluation of the Canadian dollar has continued to keep the price of Canadian paper low.

The U.S. Department of Commerce has since announced that it also will review whether the Canadian government has given subsidies to two additional paper companies, Catalyst Paper and Irving Pulp and Paper, which also have had to pay tariffs on imports but whose practices were not subject to investigation initially.

Drechsel said Tuesday he could not comment on whether lesser tariffs for those companies would affect Madison Paper, since it would depend on how those companies wanted to price their products for sale in the U.S.

In the meantime, he said the current curtailment at Madison Paper is similar to periods of temporary layoffs that occurred in 2015 and left employees out of work for 10 days to two weeks at a time. "Everyone was worried and panicked that the mill was going to shut down (in 2015), that it wasn't going to restart," Drechsel said. "We're not doing that this year. We're spreading it out more."

There is currently no long-term schedule at the mill. Employees are notified on a weekly basis of what the following week's production schedule will be, Drechsel said.

Union officials also continue to meet with the mill on a weekly basis in hopes of finding a schedule that will suit employees' needs better, Croteau said.

Workers previously were scheduled for three 12-hour shifts in a row followed by three days off, a schedule that normally gave them a 48-hour workweek. But since mid-January, workers have been scheduled for five eight-hour shifts Tuesday through Saturday, according to Croteau.

"It's a humongous lifestyle change," Croteau said. "It's also a loss in pay. People aren't making as much as they were before."

Still, there were more production days in January 2016 than in January 2015, according to Drechsel. He said there have been no permanent or temporary layoffs this year and that no employees have collected unemployment, as was the case last year.



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