International Paper Co. said Thursday that it will close its paper mill outside Franklin next spring, laying off 1,100 workers.
The layoffs will begin Nov. 7, with the shutdown of one of the plant's four machines, and continue through the spring, said Jeannine Siembida, the plant manager.
"The biggest reason is the global recession that we've got going on," Siembida said. "We've realized a good portion of the demand is not going to come back, so we've had to make this permanent decision."
Carroll Story, the president of the United Steelworkers local that represents the workers, said: "Right now, everyone is in a hole. They're in a daze, a dream. They're like, 'What happened?' "
"You have people here 30, 40 years, and this is all that they've ever done," said Story, 49, who has worked at the mill for 31 years. "It's going to be devastating to the community. There's not enough work in this area to absorb this work force."
International Paper's decision will remove a regional bulwark created by a trio of enterprising brothers in the 19th century. It's also a second blow to Isle of Wight County, which already faced a big job loss at its other large employer.
Smithfield Foods Inc. plans to close its Smithfield Packing Co. South plant early next year. Of its 1,375 workers, the company said 745 will be transferred to the nearby Smithfield Packing North plant, 290 will be given transfers to North Carolina plants and 340 will be laid off.
International Paper, based in Memphis, Tenn., announced Thursday that it would close the mill outside Franklin and two others, in Louisiana and Oregon. The local closing will account for more than two-thirds of International Paper's 1,600 job cuts nationwide.
The mill near Franklin produces about 740,000 tons a year of uncoated freesheet and coated paperboard. Uncoated freesheet is used for products such as envelopes and copy paper, and coated paperboard for greeting cards, book covers and direct-mail advertising.
Siembida said International Paper chose to shut the local plant because those two products were hit particularly hard by the economic decline.
"The company looked at capability, capacity and cost," she said. "When looking at all of those alternatives, it's not one of those that made a difference, but it was a combination of all of those."
This is the most recent and most painful of several cutbacks that International Paper has made locally in the past year.
Last November, the company announced it was closing one of the five machines at the Franklin paper mill.
In April, it said it would shut its lumber mill near the paper mill and its corrugated-container plant in Chesapeake and trim departments at the paper mill. Those moves cut about 260 jobs. And in July it announced it would lay off 100 workers at its manufacturing plant in Newport News.
It also has idled machines and enacted furloughs.
Siembida said all employees at the paper mill would get severance packages and job-placement assistance. Gov. Timothy M. Kaine announced that the Virginia Employment Commission would soon dispatch an Economic Crisis Task Force to Franklin.
The closing "is a deep blow to the community and the commonwealth," Kaine said in a news release. "This plant has long served as an economic asset for the area, and its phased closing is most distressing."
Democratic Sens. Mark Warner and Jim Webb said in statements that they would seek federal assistance for the employees.
"Over the longer term," Warner said, "it also is important that we market the quality work force in this strong and resilient community to other potential employers."
The mill dates from 1887, when Paul D. Camp and two brothers founded Camp Manufacturing Co. with the purchase of a sawmill on the edge of Franklin. They began producing paper in 1936.
Camp Manufacturing merged with Union Bag and Paper Corp. of New York in 1956 to become Union Bag-Camp Paper Corp., which was later shortened to Union Camp Corp. In 1999, International Paper purchased Union Camp in a deal valued at $7.9 billion.
"Am I surprised to see the mill closing?" said Dennis Ruggles, a director with Fitch Ratings in Chicago who studies the paper industry. "No. I'm not surprised at all."
International Paper is faring better than most paper companies, Ruggles said. Even so, it is suffering the twin blows of the economic downswing and the gravitation of advertising from print to online.
"Paper producers don't close mills lightly," he said. "You get to a point where it's too expensive to carry a fixed cost, and something has to give. You have to take down your highest-cost mill."
International Paper said it expects to take a charge of about $1.1 billion to write off the closing assets. The company is scheduled to report its third-quarter earnings next week. In July, it reported second-quarter earnings of $136 million, a bit more than half of the $257 million it made in the same period a year before.
Its shares rose 61 cents Thursday to close at $24.38 each on the New York Stock Exchange.
"The message I've tried to give people is, the employees of this facility have done all that they could do," Siembida said. "This is in no way a reflection of their abilities and talents. It was unfortunate that we got caught up in this recession, and we needed to match that supply with demand."
For Story, the union president, the closing violates the American promise in which his colleagues put their faith.
"We were taught to get up and go to work and build a product that we can sell," he said. "When we do the right things and were profitable as long as we were, how do you justify taking this mill out of the system?"
Pilot news researchers Jakon Hays and Maureen Watts contributed to this story.
Philip Walzer, (757) 222-3864, phil.walzer@pilotonline.com
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Franklin Paper Mill closure
I have driven through Franklin many times over the last 40 years, I'ts truly sad when a major employer closes. I had many friends who worked at the Norfolk Ford plant.
Maybe the Navy could step in, buy the property and construct a OLF there.They could use the local labor force to build and maintain the field.It certainly would smell a bit more pleasant, just a little nosier.
Dawson Sterling
Things aren't that bad in Franklin
...for everyone.
http://tidewaterlog.blogspot.com/2009/10/franklin-paperweight-factory-to-stay.html
IP Franklin Plant Closing
The CEO of IP John Faraci made $4.71 Million dollars in salary, bonuses, and stock options.
His past 5 year compensation total added up to $13.68 Million dollars in salary, bonuses, and stock options. Forbes 2006 figures.
http://www.forbes.com/lists/2006/12/OV9A.html
China, Indonesia, Malaysia and the emerging countries are using more not less paper.
Smithfield moved out also, and it wasn't because people are eating less pork.
I just hope that whoever is the next Governor of the Commonwealth doesn't cut state taxes anymore.
Franklin gets 37% of its annual budget from the state and the fed.
Bless their hearts.
Pilot spin
Did I read that our Democratic leadership wants to seek federal tax money to give to the employees of this plant? Why them and not the employees of any other company that fails when demand is not high enough?This doesn't have to be a bad thing. Earlier it was reported that they will get nice severance packages. Will they get the severance even if they have secured other jobs and won't miss a paycheck? In that case it will be a windfall for them. Now that the plant is closing and simpathies are flooding in, it seems like they have nothing to worry about as their finances will actually improve. Federal tax dollars for employees of a private business? Seems like another liberal bailout. What about the employees of the Payless Shoes that has to close? Liberal Government wants to protect everyone from the hazards of life. The problem is that when they do that, no one succeeds. More taxes for private business failures.
To put it nicely, you are an
To put it nicely, you are an idiot. The severance packages will NOT be lucrative for those folks working at the mill. They are your typical two week deals. For your sake, I hope you don't lose your job.
She Devil
Last year the paper mill in West Point was having serious financial problems and there was a lot of talk about major layoffs. Living in a neighboring community I remember how devestating the news was to so many people as the paper mill is the main source of employment for the town. I can't imagine what the people of Franklin are going through and will continue to go through for a long while. This will have a snowball effect on other businesses in Franklin as a result of this closing. As far as other feedback readers left about residents becoming farmers and such, I hardly think that is a viable solution as the farming industry has been hit hard for many years now. The area I live in used to be a farming and seafood community but now almost all of the farms are gone and the watermen cannot make a living either. My hearts go out to the families in Franklin. They are definately facing dark days ahead.
Wake up, sheeple, I have a
Wake up, sheeple, I have a bridge to sell you
what its all about
The real story here is the people and community of Franklin and the surrounding counties and how this will affect them. I grew up in Franklin. My father worked at Union Camp and retired from there. His salary put me and my two siblings through college. I worked there summers. Everyone I know has some connection to that paper mill. Franklin was the BEST place to grow up and has a sense of community pride like no other place I know. This is devastating news and we all need to include these folks in our prayers.
Downsizing from an over-blown economy
Today's comment in this Paper company's deliberations tells a sad story; decades of hyper-financing enabled a huge overcapacity to develop going back to the 1980s and the trickle-down Voodoo economics of the first Reagan Administration. Building our economy on inflated equity and shaky financing teased business into overbuilding and that necessary in a competitive manufacturing business like Wood/Paper led them down a road without an outlet. Downsizing is brutal and for people at the lowest levels there is only survival to seek.
"Breaking News"
I was surprised this story didn't warrant a "Breaking News" e-mail, especially given some of the e-mails The Pilot sends out. This is one of the biggest news stories of the year.
She Devil
It came out on email yesterday as breaking news.
Fault
It's our own fault all of us that buy Chinese just because it's cheaper!
Buy American when given the choice!
Unions
Obama loves the unions. This country cannot continue to compete with other countries when the unions insist on paying employees more than the market will allow. The union pushed the salaries so high that they could no longer compete with non union companies. There is a limit as to what an employee should earn working in a paper mill. The union pushed that salary beyond what they should be making. Obama insist on giving government contracts to union workers and the tax payers will pay for it. The unions with Obama's support will destroy this country. Without the union, the Paper Mill would continue to operate.
If anyone from the VP is reading ....
Do you know from where the VP buys its newsprint? I was told a few years ago (unconfirmed), it was from Finland. I don't think Franklin manufactures newsprint, but if it were true, it would serve as another ingredient in the faltering U.S. paper industry.
vp
hell, the only reason we still get the pilot is for the coupons
Our hamster loves it
as a cage lining. He refuses to read many of the articles anymore though - says it's become way too Left.
Franklin Paper Mill Closing
I am saddened and horrified by this announcement. Guess the operation will move to China then we will be shocked to learn that our new cheaper option produced in China ruins our printers. You now, without regulation of any kind we gladly accept the consequences. I am disgusted that our political representation has brought us to this moment. We have no representation be it Dem or Rep who stands up for working people in this State. The Middle Class or working people have no protections in Virginia. I'm sure the owners of the Franklin paper mill will go on and enjoy a profit created by labor at a much cheaper labor by others in another country. Meanwhile we here in this State are left to wonder at our political choices in the last thirty years. So far a rising tide has not lifted my boat nor all of the middle class in this area. Why do Virginians continue to vote against their self interest? I have no answer for the citizens of Franklin except to say that I want for you to have a meaningful way to make a living. Political representation that has your back. This is a learning moment for all of us. If it can happen in Franklin Virgina it can happen to any Virginian.
It can happen to anyone
It can happen to anyone anywhere
It is about helping the folks in Franklin, not politics
How in the world could you bring political issues into a discussion about how the city of Franklin will survive the closure of the paper plant? It has been there for years, it smells when we pass on the highway, but, somehow, we feel ok because we know it has many people working there (much like the Ford plant in Norfolk when it was open). Posters seem to have an agenda which goes beyond the well-being of Franklin residents, which many of us do not understand. Franklin residents want support, not political debates.
I agree!
What irritates me the most, no matter what happens in the neighborhood/city/county/region/state/country/continent/world, it's Obama's fault first. Then, no, it's Bush's fault! So yes, I agree Kenny. It's always a political debate, a no-win situation.
The plant is closing. Not one person in Franklin and surrounding areas won't be affected in some way. The paper mill is an icon of Franklin. The employees of the mill and their fathers and their fathers don't know anything but paper. This is typical of rural areas and the majority of paper mills are in rural areas. This is often the major, if not the only industry in town.
I had family in Franklin and I had family who did business in Franklin. I have a husband who still does business at the paper mill. Most of my family is/was from Southampton County.
I applaud your efforts to begin anew and I can only hope that the citizens of Franklin and the employees of the mill get the respect they deserve. May God bless all of you.