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August 10, 2006
Wauna Mill Makes Changes, Including Job Reductions, to Compete in Global Market
CLATSKANIE, Oregon (STPNS) --
?The Wauna Mill is embarking on a rapid transformation of our pulp and paper business to accelerate the pace of organization and process change aimed at ensuring this facility can compete in the new global marketplace,? stated a press release issued by the mill Monday.
In a series of meetings last week, James Jordan, vice president and general manager of the Wauna Mill, met with employees to discuss ?Wauna?s need to make a significant change to its manufacturing processes and cost structure to stay ahead of global competition.?
?A critical, but extremely difficult piece of the process is to reduce the workforce in order to drive the new processes and achieve efficiencies,? the press release stated.
?In no way is it a reflection of the hard work and dedication of our employees,? stated Jordan. ?This is a situation where the marketplace is changing and to compete we?ve got to change too.? This is similar to other industries including the steel, textiles, electronics, and automobile industries that have had to make significant changes in order to compete.
The mill?s approximately 150 salaried workers were recently offered an ?enhanced severance package,? Jordan told the Chief Monday, and 25 to 30 of them have voluntarily agreed to accept the offer, deciding to retire early, move on to ?do something different or go somewhere else in the industry.? Bringing the number of salaried workers to about 125, ?achieves what we were trying to do? among that portion of the Wauna workforce, Jordan said.
Union workers at the Wauna Mill were told Monday morning that the mill?s hourly workforce of approximately 900 would be reduced by 90 to 100 positions. The reductions will be made as dictated by the terms of Georgia-Pacific?s contract with the United Steel Workers (USB) Local #1097, Jordan said, which dictates that reductions within departments be made on a seniority basis, with employees with the fewest months or years of employment being laid off first.
Jordan told the Chief that a voluntary ?enhanced severance package? had been offered to the union, but was rejected.
Rick Erickson, president of Local 1097, said the severance package offered by the company did not meet the needs of the union workers. But both Jordan and Erickson told the Chief they were ready and willing to continue to talk.
Erickson said the union workers had been told that about 50 percent of the cuts would come in the maintenance department and the rest from other operations areas. ?We?re asking that positions that haven?t been filled (as openings have occurred during the last few months) be included in the count? of reductions, Erickson told the Chief. Additionally, he said, the union would work to ensure that the lay-off language and call-back clauses in the contract is honored.
?We are going to do what?s best for our membership,? the union president stated.
If the Wauna Mill is successful in competing with other Georgia-Pacific mills on the West Coast to be selected as the site for a new $200 million number 7 paper machine - a decision which is expected later this month - the anticipated cutbacks among union workers could be significantly reduced. A new paper machine would provide 32 to 40 additional positions, and more jobs would be added in the converting department that would serve the new paper machine.
Employees Praised, ?Rapid Transformation? Starts
?We?ve been hit hard by rising energy prices, increased raw material costs, more aggressive competition, and rapidly changing markets,? Jordan noted.
In addition to domestic competition, imports from China and other nations are increasing at a considerable rate. Foreign subsidies and other factors give importers enough of a price advantage that they can increasingly afford to pay high shipping costs to bring lightweight products to markets, according to Jordan.
He adds, ?Our employees have worked hard and made consistent improvement. But the competition is getting better too. To keep ahead, we need to make a significant change to the way we do business.?
In his conversation with the Chief Monday, Jordan stressed that ?our employees have done everything they could do to make this mill successful. They have been very dedicated and have done a great job, but the dynamics of the marketplace have changed...But I want to say, and I mean it passionately, that the people here work very hard and we know that there have been generations of families that have been dedicated to this mill.?
To implement the changes deemed necessary to remain competitive in a global market, Georgia-Pacific is conducting an efficiency study called ?Rapid Transformation? at all of its pulp and paper mills in North America to improve the efficiency, productivity and returns at these facilities. It will include a continuation of planned investments in new technologies at the Wauna Mill and organizational improvements to better leverage the knowledge and skills of the workforce.
That process began Monday at the Wauna Mill. Information meetings held last week outlined the 12-week process to employees. A large part of the 12-week cycle is training employees in the new work processes.
?At the same time, Georgia-Pacific?s management team is aggressively working to develop a new organizational structure. It?s a very dynamic process that will unfold over the next few weeks as decisions are finalized on capital investment projects, improved work processes and new organizational structures.? the press release stated.
Another major piece of the process is creating a capital investment plan that will modernize the mill?s assets over the next several years. Georgia-Pacific, now owned by Koch Industries, is committed to making significant investments in businesses that demonstrate a track record of improvement, according to the press release. ?Those investments ensure long-term profitability and provide the highest employment security at our mills for the long-term future.?
Jordan added, "We want to position the mill for long-term operation in the community and this bench marking process will help Wauna do that."
?During this transition period, the Wauna Mill will remain strongly committed to safety, environmental compliance, and creating long-term value for our customers, employees and communities.?
Located in eastern Clatsop County, Oregon about 12 miles west of Clatskanie, the Wauna Mill has been providing careers in the community since 1965.
Headquartered at Atlanta, Georgia-Pacific is is one of the world?s leading manufacturers and marketers of tissue, packaging, paper, pulp, and building products and related chemicals. The company employs approximately 55,000 people at more than 300 locations in North America and Europe. Its familiar consumer tissue brands, most of which are made at the Wauna Mill, include Quilted Northern®, Angel Soft®, Brawny®, Sparkle®, Soft 'n Gentle®, Mardi Gras®, So-Dri®, Green Forest® and Vanity Fair®, as well as the Dixie® brand of disposable cups, plates and cutlery.
Georgia-Pacific?s building products manufacturing business has long been among the nation?s leading suppliers of building products to lumber and building materials dealers and large do-it-yourself warehouse retailers. For more information, visit www.gp.com
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