Mill facing layoffs, but hope is not lost
September 29, 2010
GORHAM — Despite a foreboding note to the state and local municipalities from the general manager of the Cascade mill, the company looking to buy the mill is still hopeful.
"The closing is still on in my mind," said Jeff Pollock, CEO of MerchantBanc, the firm negotiating with Fraser to buy the mill. "We're still moving forward."
The closing date is scheduled for September 30. It was originally slated for the end of August, but that date had to be pushed back because everything was not in order for the sale.
Mr. Pollock said the closing may get pushed back again.
The September 30 deadline, however, could have serious implications for people working at the mill. Last week general manager Willis Blevins sent out a letter extending the mill's WARN Notice and warning that if there is no deal by September 30 there would be layoffs.
"This letter will serve as a further extension of that notice until October 13, 2010," the letter said, "with the expectation that if discussions fail to secure a sale Fraser may indefinitely cease operations and lay off all employees as early as September 30 depending on whether it can secure profitable orders for its paper products."
A recent filing at the state Public Utilities Commission revealed Fraser is losing $600,000 per month on its Gorham facility.
"Fraser will continue after that date to attempt to procure a buyer for the mill," the letter goes on to say. "The Gorham mill is expected to be shut indefinitely during Fraser's continued efforts to sell the mill."
Mr. Blevins did not return calls for additional comment, but the letter said all positions will be terminated.
The WARN Notice requirement is part of the Worker Adjustment and Retraining Notification Act, which requires companies with 75 or more employees to give the state and local municipalities 60 days notice before closing facilities or laying-off more than a third of its workforce. Fraser employs 237 people at the Gorham mill.
"Advance notice provides workers and their families time to adjust to the prospective loss of employment, to seek and obtain alternative jobs and, if necessary, to enter skill training or retraining that will allow these workers to successfully compete in the job market," a Department of Labor summary about the act says. "The WARN Act also provides for notice to State officials so that dislocated worker assistance can be promptly provided."
Fraser issued its first WARN Notice on June 30 and extended it on August 25. This is the third extension.
Still, despite the tone of the letter, MerchantBanc is unperturbed.
"They've had in the past temporary shutdowns that haven't had any impact at all," Mr. Pollock said. He has maintained a positive outlook since the agreement was announced, despite several unexpected roadblocks. He brushed off questions about whether the deal was falling apart.
"People tend to only hear the bad," he said. Investors backed out, he said, but others have come to fill their place. He met with Mr. Blevins last Wednesday, he said, to continue working on the deal, which he reiterated is still moving forward.