It's a gap between supply and demand. That's the explanation International Paper managers are telling their employees as they plan to lay off dozens of employees at the plant. Tuesday morning the Augusta mill announced it will shutdown its No. 2 paper machine.
"It is not due to any product issue, any quality issue, or performance issue. It is a global issue," said Dick Jackson, Augusta Mill manager. "We have to equalize supply and demand. So it's nothing they did."
The No. 2 paper machine is the smallest of the three machines at the site; producing 140,000 tons of coated paperboard each year. Employing more than 700 people, IP released a statement to Fox54 saying the demand for the coated paperboard is no longer as big as it once was, so they're cutting resources and 75 jobs.
Employees with the Augusta Mill aren't the only ones being affected by the move. Businesses nearby say they're going to be losing a lot of customers.
"Oh, it's probably going to slow us down quite a bit," said Lori Williams, store clerk at the Golden Pantry up the road from the mill. She said many of the paper mill employees who will be let go are some of her most loyal customers. "Well I hate the fact that they're going to lose their jobs. I mean, a lot of them have little kids. Some of them have newborns. You know, I talk to a lot of them every day."
Although some employees will be lai9d off, Mayor Deke Copenhaver hopes those men and women will find other work quickly.
"As we bring in Rockwood, which will be 100 new manufacturing jobs, as the Starbucks facility comes online, that 172 new manufacturing jobs that will be potential to find work at those two facilities," said Mayor Copenhaver.
IP managers say the mill will continue to operate its other two world-class paper machines, as they prepare to support the employees through this transition. The No. 2 machine will be shut down by the end of February 2013.
Release from International Paper:
International Paper Announces Paper Machine Shutdown
Balancing Production With Demand Competitively Positions Augusta Mill
Augusta, Ga. – January 22, 2013 – Today, International Paper (NYSE: IP) announced plans for the permanent shutdown of its No. 2 paper machine and associated equipment at the Augusta, Ga., mill by the end of February 2013. This machine produces approximately 140,000 tons annually of coated paperboard, used to make folding carton and liner for packaging applications, and coated bristols used in commercial printing applications. The mill will continue to operate two world class paper machines.
"The decision to shut down Augusta's No. 2 machine is difficult because of the impact it will have on good, hard working people who have been our valued colleagues," said Greg Gibson, vice president of IP's Coated Paperboard business. "We are taking steps to support them through this transition."
"The projected growth of global coated paperboard supply, coupled with slower growth in the demand for our products, has made it necessary to permanently reduce our manufacturing footprint," said Gibson. "This decision will enable us to more efficiently balance our production with current and projected customer demand."
Approximately 75 positions are expected to be impacted at the mill as a result of this decision. The company will provide severance and outplacement assistance to affected employees. The Augusta Mill will continue to employ more than 700 people and will continue to play a vital role in the area economy and in the Augusta community.
The company will continue to meet customer needs by transitioning all grades produced on the No. 2 machine to other machines at the Augusta Mill and within the IP North American system. This decision does not impact the competitiveness of the remaining two paper machines in Augusta.
"We remain committed to the Augusta Mill, to this business, and to serving the current needs and future growth of our customers. International Paper is well positioned with our brands, product portfolio, market access, manufacturing assets and global knowledge of this business. We believe the new right-sized footprint will meet the needs of the business for the foreseeable future," said Gibson.
International Paper is the largest producer of coated paperboard in North America with production facilities in Augusta, Ga., Riegelwood, N.C. and Texarkana, Tex.
FOX54 has been told by several employees at Augusta's International Paper Plant that some layoffs are coming to the facility.
We're told one of the paper machines is being shut down and that jobs will be impacted. We're told the layoffs are not happening yet, but the plant wanted to go ahead and give employees the news. Officials at the plant have not made any comment so far.
FOX54 has a crew on the scene and will continue to update you as we get more info from the company.
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