Far-reaching implications
Verso shutdown would have devastating impact on forestry, trucking, construction industries
WISCONSIN RAPIDS – The papermaking industry has ties to other industries like forestry, trucking and construction, and Verso’s decision to indefinitely idle two of its mills affects those industries it works with.
Verso announced in June it would stop production at its paper mills in Wisconsin Rapids and Duluth, Minnesota, indefinitely while “exploring viable and sustainable alternatives for both mills.”
In its announcement, Verso said options for the two mills included restarting operations if market conditions improve, selling the mills or closing them permanently. Verso later notified the state Department of Workforce Development, saying it would lay off 902 employees at the Wisconsin Rapids mill July 31.
Sen. Patrick Testin, R-Stevens Point, and Rep. Scott Krug, R-Nekoosa, started a task force to work with city leaders, mill management, the Wisconsin Economic Development Corp., the North Central Workforce Development Board, the Heart of Wisconsin Chamber of Commerce and other state and local leaders to address the needs of the area. The task force was created to help keep the Rapids mill operating, help Verso find potential buyers and to help provide support for affected employees and their families.
At a Wisconsin Rapids Together Task Force meeting in June, Testin said Verso’s announcement sent shock waves through the community, but also the region and the state. A closure would affect the entire state, especially when it comes to the forestry and paper industries, he said.
Representatives from the Wisconsin Department of Natural Resources also attended the task force meeting, with their concerns focused on the forestry and logging industries. Experts in the DNR and the University of WisconsinStevens Point natural resources and forestry departments agreed that a long-term, innovative solution would be needed to save the paper industry and affected industries in the long run. One of the focuses of the task force will be to address the impact, especially in the forestry industry.
The Wisconsin County Forests Association also acknowledged the impact to the forestry industry, saying in a release that the majority of Wisconsin counties with forested lands would be substantially affected by permanent mill shutdowns.
According to the WCFA, forest products is the second-largest industry in Wisconsin, and it supports more than 64,000 jobs and contributes more than $24 billion to the economy each year. The mills in Wisconsin Rapids and Duluth consume about 25% of the total raw material that is harvested in the state, and most of it comes from county forest lands.
The impact goes beyond economic, as well. The WCFA reports timber harvests and active sustainable forest management create healthy forest conditions, strong wildlife habitats, clean water resources and outdoor recreation options.
“The implications of the Verso mills shutting down goes much further than the mill workers and cities of Wisconsin Rapids and Duluth,” said Norman Bickford, WCFA’s board president. “This has the potential to negatively alter the course of forest management in Wisconsin and all the abundant benefits our healthy forests provide. WCFA stands ready to assist and support emerging efforts to keep timber markets intact, operational and viable in the State of Wisconsin.”
General contractors and construction companies in industrial industries are also connected to the paper industry, and they would also be affected by any long-term or permanent shutdown. Miron Construction is a general contractor and construction company that operates with a large industrial focus, with offices in Neenah, Wausau, Madison, Milwaukee, Eau Claire and Cedar Rapids, Iowa.
Len Borgen, the vice president of Eau Claire operations for Miron Construction, said Miron has been active in the pulp and paper industry since the company began, and its work with the pulp and paper industries is still one of Miron’s core business sectors. The company specializes in construction management, design, general construction and industrial services, and the company has worked with various industries, including commercial, community, education, energy, government, health care, manufacturing and more. One of Miron’s specialties includes work with the pulp and paper industry.
Miron Construction has worked with Verso for more than 15 years on maintenance and capital project, but Borgen declined to comment on its partnership with Verso or any details on its relationships with current clients or partners.
Miron Construction has experience working with all parts of a paper mill’s process, including woodyard work, stock prep, work with paper machines, converting, printing and packaging. Miron has replaced worn-out equipment during outages, installed new pieces of equipment, poured foundation and has built brand new facilities, Borgen said.
In June, the Daily Tribune reached out to Verso employees and community members through a survey to learn how the paper mill’s decision to shutdown production would affect them.
Employees, former employees, retirees and contractors and other people who work with companies associated with Verso responded to the survey, calling Verso’s decision devastating for the community and other local industries. One survey response said a mill closure would limit the number of jobs contractors would be able to bid on, meaning contracting companies would not need as many employees.
“Nearly every single business is economically linked to the success of the Wisconsin Rapids mill,” Patrick
Schacht wrote in the survey.
Schacht told a Daily Tribune reporter he has been a truck driver since 1988 and spent a lot of that time hauling paper out of the Rapids mill. His dad had worked in central services at the paper mill for almost 40 years and wanted Schacht to work there too, but instead, Schacht decided to be a truck driver, hauling paper.
He worked for a few different trucking companies, but most had a connection with the mill. At one point, he was hauling two loads of paper out of the mill each day, and he said every time he left town, about 90% of the haul was paper from the Rapids mill.
Schacht said the company he currently works for focuses on hauling dairy products, because so many other trucking companies were hauling paper. He said there are so many trucking companies and other businesses that are connected to the mill, that a permanent shutdown would drastically change the area.
Every time the mill went through ownership transitions, there would be a lot of uncertainty about what might change, but there wasn’t talk about shutting down completely before now, Schacht said. They were always hauling the same paper for the same customers.
Sherry Schladweiler Brost commented on a Daily Tribune Facebook post that she and her husband would also be affected, as they have supplied wood to the mill for more than 35 years. The couple also works with several trucking companies in the area and has subcontracted for other logging companies.
“The trickle down she wrote.
Schladweiler Brost said expenses like fuel, oil, tires, tools and insurance will also be affected, not to mention the money mill employees spend in the community.
“Our home is tied to our business as collateral,” she wrote. “We have held on and struggled through all of the changes that this mill has gone through, including their bankruptcy ... we are devastated. No warning. People like us (are) in the middle of contracts. Now what?”
Other people who responded to the Daily Tribune survey also mentioned other industries that would be affected. One woman said she has a logging company, and a lot of self-employed people like loggers, truckers and suppliers will be affected.
Another reader responded to the survey and said if the mill closes permanently, there will be less work available to bid on as an engineering contractor. Less work could mean fewer contractors would be needed at the contracting companies that work with the mill.
Schacht said the affect of a shutdown would be felt across the whole city.
“Having the mill going down would be like taking the heart out of somebody’s body. The rest doesn’t last that long. That’s how big it is to Wisconsin Rapids.”
effect
is enormous,”