WISCONSIN RAPIDS – Verso will stop production at its paper mills at the end of July, leaving its future in Wisconsin Rapids uncertain.
The company announced Tuesday it will indefinitely idle its paper mills in Wisconsin Rapids and Duluth, Minnesota, while “exploring viable and sustainable alternatives for both mills,” according to a statement.
Options include restarting the mills if market conditions improve, selling the mills or closing them permanently.
Verso plans to idle the Duluth mill by the end of June and the Wisconsin Rapids mill by the end of July, according to the company. As a result, the company will lay off about 1,000 employees between the two mills, including the majority of the roughly 915 employees who work in Wisconsin Rapids. An undetermined number of employees will continue working after July 31 to continue limited operations or maintenance.
The decision to reduce production stems from a decline in demand for graphic paper due to the COVID-19 pandemic, according to the company. Retail, sports, entertainment and tourism industries reduced their use of print advertising during safer at home orders. According to the release, demand fell by 38% in April and operating rates are expected to drop below 70% in the second quarter.
Mayor Shane Blaser said he was disappointed by the news.
“During a time when so many have so little, with COVID-19 impacting our health and wealth, this news Is even more devastating,” Blaser said. “My heart goes out to each and every one of these employees and their families.”
The Wisconsin Paper Council released a statement Tuesday morning, calling Verso’s decision to idle both mills disappointing news for the entire paper industry.
“Upon learning of this announcement this morning, the Wisconsin Paper Council has begun reaching out to state and local officials to assist in coordinating response efforts,” the statement said. “Our trade association is committed to doing all we can to provide support to the thousands of employees and community members who have been adversely impacted by this difficult situation.”
State Rep. Scott Krug, R-Nekoosa, called the shutdown a “horrendous side effect from the outbreak” in a statement to media Tuesday morning.
“Businesses big and small have been decimated from decreased demand and forced shutdowns and today, Verso in Wisconsin Rapids took the latest hit,” Krug said. “A full shutdown has never happened in the history of this mill, dating back to 1904. Today, the impossible became a reality. Growing up in Wisconsin Rapids, my heart hurts today like it never has before. It is now my mission to provide as much opportunity as possible for these families to remain and thrive in Wisconsin Rapids.”
State Sen. Patrick Testin, R-Stevens Point, said he reached out to the Wisconsin Department of Workforce Development to talk about what can be done, and he intends to do all he can at state and local levels to make sure the community and families that are directly affected recover as quickly as possible.
Wisconsin Workforce Development Secretary Caleb Frostman spoke with Testin on Tuesday morning about the number of workers affected, the work being done at the mill and how the decision might affect other paper-related companies in the area, said Ben Jedd, a department spokesman.
The agency’s Dislocated Worker Program helps workers and companies affected by permanent worker layoffs. The program provides prelayoff workshops on topics like resume writing and interviewing, job search strategies and budgeting.
The department has not yet received a Worker Adjustment and Retraining Notification notice from Verso.
Wisconsin Economic Development Corp. Secretary and CEO Missy Hughes said state officials are disappointed by the news and that it comes at a particularly difficult time for employees, the central Wisconsin region and the state.
Hughes said WEDC has spoken with Verso leaders about how to move forward and how the agency can help ensure the mill remains a strong part of Wisconsin’s paper industry.
Blaser echoed both Testin and Krug.
“Paper, pulp and forestry work is a vital part of our community’s history, spawning the charming, resilient community we know today, and this news is certain to have a profound impact on our community,” Blaser said. “I commit to furthering Senator Testin’s and Representative Krug’s efforts to support the affected employees and our community in this difficult transition.”
Angel Whitehead, president of the Heart of Wisconsin Chamber of Commerce said Verso has been an active business in the Wisconsin Rapids community, and the impact of its shutdown will be very significant to the local economy.
“We are saddened to see any announcement that includes layoffs for a local business,” Whitehead said. “We know this announcement will affect many families, businesses and communities. As the local chamber of commerce, we will aid in any way possible to provide resources and opportunities to those affected.”
Whitehead said the chamber is working with the North Central Wisconsin Workforce Development Board and other partners on a plan to assist Verso employees.
According to Verso’s website, the Wisconsin Rapids mill started out as Consolidated Water Power Company in the 1890s and began making paper in 1904 as Consolidated Water Power & Paper Company. The mill started operating with the first electrically powered paper machines in the world.
Verso President and CEO Adam St. John said the company expects the decision to idle the facilities will improve cash flow, and he expects selling inventory will offset cash costs of idling the mills.
“Decisions to idle facilities are always difficult because they impact employees, their families and communities,” St. John said. “Verso is committed to treating all of our affected employees with fairness and respect. As always, safety is our highest priority and will be our primary focus during this difficult time.”
Verso will continue packaging papers and pulp and will continue supplying graphic and specialty papers in roll and sheet form.
Verso is a Tennessee-based company that bought the Stevens Point and Wisconsin Rapids mills from NewPage Corp. in 2014 as part of a $1.4 billion deal. The company filed for bankruptcy protection in early 2016 but announced in July 2018 the owner had wiped away billions of dollars of debt and was out of bankruptcy and had successfully reorganized. Verso sold its Stevens Point mill to Pixelle Specialty Solutions in February.
This story will be updated.
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