The announcement affects 150 of the mill’s 610 employees who will be laid off over the next several months, according to Resolute Forest Products U.S. Public Affairs Director Debbie Johnston.
The layoffs are permanent, although some hourly employees will retain recall rights. Severance will be provided to affected employees according to the local labor agreement or the corporate policy for salaried employees. Outplacement assistance will be made available through government agencies.
Johnston said terms of the mill's labor agreement are negotiated with the union workforce and considered proprietary information.
She said the decision follows Resolute’s March 11 acquisition of the other 49 percent interest in Calhoun Newsprint Company, a joint venture with Herald Publishing Company LLC. The idling comes as a result of a decrease in demand for newsprint, coupled with high operating costs for the facility’s newsprint machine, which produced 215,000 metric tons per year.
Johnston said the paper machine, not the mill, was owned jointly with Resolute owning 51 percent and the Herald Publishing Company having 49 percent. The machine was operated by Resolute. Calhoun Newsprint Company was the name given to the joint venture formed between the Herald Publishing Company and Resolute Forest Products that owned the newsprint machine. However, the name of the mill is Resolute Forest Products, Calhoun Operation.
“The machine was not cost competitive in comparison to other newsprint machines that Resolute operates within its system of mills,” Johnston said. “For that reason, coupled with an overall decline in newsprint demand, the decision was made to indefinitely idle the machine and reassign current newsprint customers accustomed to receiving paper manufactured on the machine to other Resolute operations.”
The company continues newsprint production at mills in Augusta, Ga., Grenada, Miss., and Usk, Wash.
Johnston said the decision to idle the paper machine at Calhoun is consistent with the company's overall business strategy of focusing paper production on the best, most cost-competitive machines.
“Because the machine at Calhoun was more costly to operate than many other newsprint machines the company owns, the decision was made to move production to more efficient machinery,” she said. “The Calhoun mill will continue to operate two paper machines along with a pulp dryer. These two paper machines produce commercial printing papers used for books, manuals, inserts, flyers and other commercial printing applications.”
Bowater Calhoun began as a big gamble in 1954 when Sir Eric Bowater selected a farm along the banks of the Hiwassee River. It was a bold venture and a big risk to build a newsprint mill in the South at that time.
It was, in Sir Eric’s words, “A dream too beset with difficulties to be realized.”
Bowater officials hailed the big gamble 50 years later as a fabulous operation and centerpiece of the company’s newsprint operation. The plant was built with an investment of $60 million. In 2004, it would have cost a billion dollars to rebuild Calhoun Operations, which a scant nine years ago was the largest producer of newsprint in the United States.
In 1954, the mill had 750 employees who produced 180,000 tons of newsprint and market pulp annually. In 2004, the plant had 900 employees who produced 990,000 tons. Bowater paid $89 million annually in wages and salaries. Forty to 45 percent of the employees lived in Bradley County. In addition, there were 150 contractors who hauled 350 truckloads of logs to the mill each day.
In 2006, the Calhoun operation still produced a total of 465,000 tons of specialty grades and 300,000 tons of newsprint.
Abitibi-Consolidated Inc., a Canadian company, and Bowater Incorporated announced a merger in October 2007 to form AbitibiBowater. At that time, the new company owned or operated 31 pulp and paper facilities and 35 wood product facilities located in the United States, Canada, the United Kingdom and South Korea.
The company announced in December 2008 it would close or idle four paper mills in order to bring its production capacity into balance with falling demand. Lines one and two in Calhoun were idled indefinitely in December 2008. That decision also resulted in the loss of 150 jobs. The machines were not operated in 2009 and the status was changed to permanent in December 2009.
AbitibiBowater entered bankruptcy in 2009 in Canada and the United States after deciding there was no other way it could deal with its debt of more than $6 billion. It emerged from bankruptcy in December 2010.
The company changed its name to Resolute Forest Products on Nov. 7, 2011.