|Asheville, NC Feb. 5, 2004|
Blue Ridge Paper plans to eliminate 100 jobs
CANTON - Blue Ridge Paper Products, one of Western North Carolina's largest employers, announced Tuesday the company would cut 100 jobs because of $30 million in net losses during the past three years.
The cuts are the first since employees banded with a New York investment group five years ago to purchase the company. The buyout was an attempt to save jobs when Champion International put the papermaking operation on the market.
Blue Ridge's decision comes after more than 1,100 people in the region learned in recent weeks they would be forced into unemployment. Three manufacturing plants - Drexel Heritage in Marion, Steelcase in Fletcher and Cooper Bussmann in Black Mountain - will all shut down within 18 months.
"If Blue Ridge was to actually ever close, it would cause a catastrophe," said the Rev. Walter Bryson of Waynesville, a 27-year employee of Blue Ridge, which makes juice cartons and envelopes.
Bryson said he was shocked by the pending layoffs and frustrated by his longtime employer's business decisions.
"We're supposed to be employee-owned, but we don't have any say in what goes on," he said.
Employees and KPS Special Situations Fund, a New York investment company, jointly own Blue Ridge. There are 1,400 Blue Ridge jobs in Haywood County. The company also owns five packaging plants in five other states.
Blue Ridge will make the job cuts at the Canton mill and among corporate staff, said Darrell Douglas, vice president of human resources.
The reductions will start with a voluntary separation program for salaried employees.
"In the event that there are not enough volunteers, we may have to resort to layoffs to achieve our target," Douglas said. "We will be reducing a number of hourly positions in the paper division. However, we are committed to making these reductions by attrition."
In a Tuesday memorandum to employees, Blue Ridge President Rich Lozyniak wrote that the company continues to lose money. Lozyniak blamed decreasing prices for paper products and rising health care, energy and fiber costs.
"To remain competitive we must make some difficult decisions so we can become profitable again," he wrote.
Heart of a town
The mill has been a part of Canton for 99 years. The small town, home to 4,029 people, grew up and around the papermaking operation. Today, Blue Ridge is Haywood County's largest private employer.
"Canton has always been known as an industrial town," said Canton Mayor Pat Smathers. "You don't think of Canton without thinking of the mill."
News of the layoffs didn't surprise some of the town's residents.
Tom Wilson, owner of American Cleaners, a shop across the street from the Canton mill, said the layoffs are in line with a fluctuating national economy and continuing regional economic woes.
"Because of the economy everybody is laying off," he said.
Bob Mulligan, associate professor of economics at Western Carolina University, said Blue Ridge's cuts are symptomatic of problems plaguing all manufacturing operations in WNC.
Though Blue Ridge may find an employee-owned company cheaper to operate, he said, "You can't escape the overriding business environment where people don't want to pay as much to buy your product."
In his memorandum, Lozyniak noted Blue Ridge refinanced in December in hopes of improving the company's bottom line.
"It did not solve the unpleasant facts that some of the markets that we serve are in decline and may never fully recover and that some of our equipment is not as competitive as our major domestic and foreign competition," he wrote.
The job cuts would reduce operating expenses by $10 million per year, according to the memorandum.
Even if the company uses voluntary cuts, jobs will still be lost to Haywood County and the region, said Mark Clasby, executive director of Haywood County Economic Development Commission.
"That's 100 less jobs available," he said. "It's part of the changing economy, unfortunately."
Contact Ostendorff at 452-1467, Ext. 310, or JOstendorff@CITIZEN-TIMES.com.
Contact Ellison at 452-1467, Ext. 309, or QEllison@CITIZEN- TIMES.com.