Great Northern Paper Announces Temporary Layoffs as Mill Lowers Costs Toward Restart

EAST MILLINOCKET, ME—February 6, 2014—Great Northern Paper (GNP) announced that it must temporarily lay off employees as it continues to work on restructuring mill operations and lowering production costs toward its goal of restarting the mill. GNP temporarily stopped manufacturing on January 23, 2014 due to the current high costs of production combined with lower market prices for its products.

GNP spokesperson Scott Tranchemontagne said, “We understand this temporary work stoppage will be difficult for employees. This is a different course than expected when we began to restructure, but it is a necessary step. We continue to work diligently on addressing fundamental operational issues that must be overcome for GNP to restart and remain viable over the long term.”

A total of 212 employees are receiving temporary layoff notices. Forty four employees will continue to work on cost reduction initiatives and keep needed systems running smoothly to allow for a production restart.

Tranchemontagne noted the successful start of Thermogen Industries in nearby Millinocket is critical to GNP’s long-term viability.

“Thermogen will help Great Northern Paper by sharing resources and realizing cost synergies between both operations,” said Tranchemontagne. “Thermogen is a key factor in GNP future success, and all parties continue to work toward a financial close.”

The paper industry is more competitive than ever, which continues to drive paper prices down, meaning less revenue during a time when GNP is paying high costs for wood, pulp and energy. The company had been preparing a conversion to heating the mill with natural gas so that its biomass boiler could be dedicated to powering two paper machines, but extremely volatile natural gas prices render this option unfeasible.

“GNP must focus on reducing all our various production costs, make critical investments to our operations, and restart as a two-machine mill to be viable over the long term. We remain committed to working as hard as we can with all of our partners toward success.”

Source: Great Northern Paper.