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Wednesday, 05 September 2007 00:00

Mills new owners have a strong legacy to live up to

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When the new owners of the Canton paper mill announced a few weeks ago that company headquarters were being moved to Memphis, it was seen as mostly a footnote to the larger story of Blue Ridge Paper’s sale to the Rank Group of New Zealand. That story of the mill sale became public back in April.

But the move to Memphis is symbolically important in many ways, and at least two of them are worth noting for the potential impact on Haywood County and the region. First, the successful sale of Blue Ridge Paper to the Rank Group was the culmination of what some mill insiders describe as an almost miraculous story of survival, one in which every employee will benefit.

Secondly, the move marks the end of a 100-year tenure of Canton-based mill managers and company executives who cared deeply about their community and their employees. That story is one unique to mill towns, one that is fading into history as the global economy changes the fundamental nature of the manufacturing industry.

 

A survival story

The impact of the paper mill on Canton and on the region is a story of epic proportions, and entire chapters could be written on its environmental, economic and cultural legacies. Books are already in print on the subject, and it’s very likely that more will be published. But these last eight years have been, perhaps, the most remarkable in the mill’s history.

When Champion announced plans to sell its Canton mill in 1999, the likelihood of closure was high. That would have put nearly 2,000 people out of work. But through community support, especially the work of many regional leaders, a plan was developed. KPS, a New York investment company that was well known for working with unionized companies, provided the cash to buy the mill while workers agreed to a series of pay cuts, wage freezes and benefit reductions. In exchange, the employees got 40 percent of the mill’s ownership and profit sharing.

Over these eight years, the profits have not materialized. Many times it seemed the mill was on the verge of closing, and it had racked up a debt of $213 million by the time of the sale to the Rank Group. Somehow, though, management and workers always found a way to survive. New markets were found. Employee productivity skyrocketed. During an eight-year span when about 100 North American paper mills closed, Blue Ridge held on.

That meant that the 1,100 remaining jobs in Haywood County also survived. And, despite the debt and the gloomy outlook for the industry, a buyer emerged that at least for now plans to keep the mill open. In addition, workers will be able to get somewhere around $20,000 each for the stock they own. The deal may not have worked out as many had hoped, but in the end the jobs are still intact, the mill is in the hands of a growing force in the paper industry, and workers will get a sizeable stock bonus.

 

Now, a cog in a big wheel

While the last eight years are a story in survival, the move of company headquarters to Memphis marks a turning point in the mill’s 100-year history in Canton. Even though the old Champion International had headquarters elsewhere, there was always the feeling that Canton was a centerpiece, as it was when Reuben Robertson Sr. founded the mill in 1906. When Blue Ridge Paper was formed, it initially decided to locate its headquarters in Asheville but soon came back to Canton.

There has always been a symbiotic relationship between the paper mill, Canton, and all of Haywood County. Mill employees were paid well, and that prosperity brought further benefits to the region as the workers sent children off to college and spent their hard-earned wages on homes and other items that brought prosperity to lthe ocal business community.

Now, as new owners take control, differences are already apparent. The privately held Rank Group won’t be holding press conferences to announce profits and losses, and its executives are reluctant to talk to the media at all. The steadfast support that has been shown to the mill — even when it was being sued by Tennessee residents and cursed by environmentalists for degrading the Pigeon River — was always about more than just the jobs it provided.

The short history of Blue Ridge Paper has come to an end, as did the long story of Champion in 1999. Only the future will tell how Rank — and its umbrella company known as Evergreen — will treat the workers and the community that have embraced the paper mill through decades of controversy and prosperity. We can only hope for the best.

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