Several of the machines at Pulp and Paper of America plants in Berlin and Gorham remain idle this week, while its parent company tries to work out its financial problems. The company's troubles show no sign of ending, however. NHPR's David Darman has more.
Laid off workers at the Pulp and Paper of America plants say they're uncertain about the duration of their layoffs. Raymond Blais, president of the Paper, Allied-Industrial, Chemical and Energy, or PACE union, local 75, says the company has delayed its schedule for reopening the plants several times, beginning in early August.
"It started off a couple of weeks ago, it was going to be a one week layoff, and then it was going to be a two week layoff, and now they're saying that it could be its going to be a week to week basis. It all depends on their refinancing."
Company officials say the delays are necessary because the paper market is weak. Kurt Goldschmidt is vice president of American Tissue, Incorporated, the parent company of PP and A. Goldschmidt says American Tissue has shut down six plants, including two in New Hampshire, one in Vermont, and another Maine. Goldschmidt says the company needed to do this because of soft demand worldwide for paper products.
"What we're trying to do is reduce the inventories of pulp and paper that we have in our various mills, so that we have temporarily shut down a number of pulp and tissue mills. Now we intend to continue to convert and ship product made from that paper."
Goldschmidt says American Tissue is having financial trouble because high fuel costs and static prices have weakened the company's profits, and its cash position.
American Tissue's financial problems have definitely affected local in Berlin and Gorham. Berlin says the company owes them 4 million dollars in back taxes, with interest on unpaid balances mounting each day.
Berlin Mayor Bob Danderson says that money accounts for more than a quarter of the city's budget, so immediate belt tightening is in order.
"The city is taking a measure of cutting all departments by eight percent. We'll being having a meeting about this in Monday's council meeting, but we're adamant about an eight percent cut."
The mayor says those cuts could keep the budget balanced through December, but that any further problems will mean more drastic cuts for police, fire, schools and other services in the months after that.
Gorham also claims that American Tissue owes them about four-hundred and thirty thousand dollars in back taxes, but the company disagrees. The dispute is before the state's Bureau of Tax and Land Appeals.
Despite the appeal, William Jackson, Gorham town manager, says the town will move forward on its plan to take mill property by eminent domain.
"Our legal team is moving on behalf of the town to take the hydro properties along the Androsscoggin River, and the solid waste landfill in success. And the next step of that is to have an appraisal, which we are having done right now. And what happens at that point is an offer is made to the company. If the offer is refused then we go for a taking."
American Tissue's financial situation is causing anxiety on many levels, even with the president of the company. After the Berlin Daily Sun reported on the financial troubles of the company, and that there may be other paper companies interested in buying the Berlin and Gorham plants, American Tissue president Mehdi Gabayzadeh called the managing editor of the paper. Reporter Barbara Tetreault explains what happened.
"He was upset - he actually was very agitated, very upset, and he used language that was offensive, to be honest. I mean, he swore at our managing editor and said that we were to blame for the people being out of work here and you know, and I guess he ended up hanging the phone up on her."
Gabayzadeh's tirade didn't help his company find new financing. But officials at American Tissue say they're negotiating with bankers and other financiers to improve their cash position. In the meantime, several workers at the paper plants in Berlin and Gorham are searching the southern part of the state for new work. The company says it's unsure when the plants will reopen.
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