ALBANY, Ore. - A major employer announced Thursday it will shut down an Albany container board mill, putting hundreds of Oregonians out of work right before Christmas.
International Paper’s Albany mill has been around for more than five decades and long-time employees said there will be a significant ripple effect.
“I don’t think anybody realizes the rock that was thrown in the pond of Albany,” said employee Todd Dittmer. “It’s going to be huge. Restaurants, retail, Boys and Girls Clubs, YMCA – all these places in some way has been touched by the employees at the mill.”
Dittmer described the plant as a pillar in the community and with importance to his family. Not only does he work for the company, but so did his father.
“He was here two years after it started,” Dittmer said.
He is not the only one with deep roots at the company. Some employees are 30- and 40-year veterans. Dittmer said it’s why news of the mill closing after 50 years in operation was so devastating.
Mill manager, Jeff Yoder, said the mill is closing because of a steep decline in the container board industry, namely cardboard box materials.
“As the economy slowed and consumer buying habits cut back, we saw our segment decline pretty rapidly,” he said.
He said aggressive moves to combat the decline, like laying off 40 employees last year were unsuccessful.
Two hundred thirty employees will lose their jobs when the mill closes in December.
The global recession has slashed demand for paper and paperboard products and IP, which has been cutting capacity since 2008, said a recovery is not in sight.
“The company’s demand is not expected to return to 2008 levels in the near future,” IP said in a statement.
Nationwide, the company employs about 57,000 people and, in addition to the Albany closure, will close plants in Pineville, La., Franklin, Va. and an idled machine at the company’s mill in Valliant, Okla. In all, 1,600 jobs will be eliminated.
The moves, to be implemented from mid-December through spring 2010, will cut IP’s capacity, which has been about 16 million tons, by about 2.1 million tons or 13 percent.
“We have concluded that we have excess capacity in our North American paper and packaging businesses, and these decisions will better match our supply with our expected customer demand,” CEO John Faraci said in a statement.
Following these permanent shutdowns, IP will have about 10 million tons of North American containerboard capacity, 2.6 million tons of North American uncoated freesheet production capacity and 1.7 million tons of North American coated paperboard capacity.
Charges of about $1.16 billion for the closures will be booked in the fourth quarter and first quarter of next year. In addition, IP will incur additional closure costs.
Shares rose 71 cents, or 3 percent, to $24.48 in afternoon trading.
The company said laid off employees will get some severance and retraining, as well as help finding new jobs.
The Associated Press contributed to this report.