Georgia-Pacific is shutting down a major division of its Baton Rouge-area paper mill, a move that will leave nearly 700 people without a job as the company exits the communication paper business.
About 300 people will continue to work at the mill, producing toilet tissue and paper towels for retail purchase, the company said.
The company said it will permanently shut down its office paper machines, converting assets, woodyard, pulp mill and most of its energy-generating complex in Port Hudson by mid-March. About 650 of the jobs being lost at the facility are in office paper and pulp assets, and about 40 more business and sales jobs are primarily in Atlanta where Georgia-Pacific is based.
Kelly Ferguson, a Georgia-Pacific spokesman, said the layoffs have nothing to do with the hard work done by the employees at the paper mill, but reflect the fact that the demand for office paper isn’t viable long term because of the shift toward electronic and digital communications.
“The fact is the market for these products have been declining by 3 percent to 5 percent annually for the past five to 10 years,” he said. “People aren’t using as much paper.”
According to the American Forest and Paper Association, demand for office/copy paper has declined by nearly 57 percent over the past 10 years. At least three dozen mills in the U.S. still produce office/copy paper.
Georgia-Pacific will work with union leaders and salaried staff on how to best shut down the division and find work for employees at other company-owned facilities.
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Jimmy Buxton, president of the United Steelworkers Local 335 at Georgia-Pacific, said the paper production jobs at the plant have good wages. Buxton, who was told Thursday he was losing his job at the mill after 30 years, said he made $125,000 last year. The majority of workers who are affected by the layoffs make $80,000 to $100,000 annually. “There’s a lot of overtime,” he said.
The jobs producing toilet paper and paper towels are slightly lower paying. While Buxton said he earns $32 an hour, the top jobs on the tissue machine pay about $27 an hour.
Delton Lucas, who turns 61 at the end of the month, has worked at the Georgia-Pacific mill for 42 years. His father moved the family from Georgia to Baker in 1968 after getting a job at the mill. Lucas found out about the layoffs from Facebook Thursday morning.
He was told the company would give him more information at a meeting at 4:30 a.m. Friday, but Lucas said the division where he works as an operator is being shut down. He recently bought a house and was hoping to work for several more years before having to make a decision about retiring. Now, he doesn't know what he'll do.
"There's not a whole lot of people looking (to hire) someone my age," he said.
The Port Hudson mill used to be Georgia-Pacific's flagship operation, Lucas said, and people would come visit from throughout the country and world to see how it ran. But there were management issues in recent years, he said, as the company fired many of the more experienced salaried employees.
Kendall Gerald, president of the United Steelworkers Local 1334 at the mill, said while plant workers knew that demand for office paper was declining, the news of the layoffs came as a surprise.
Georgia-Pacific announced in January 2018 it would shut down office paper production at a mill in Camas, Washington. “We were told we would be the last ones standing making fine paper, that they were putting all the eggs in one basket here,” Gerald said.
The next step is to find out which workers will be affected by the shutdown. Gerald said negotiations between Georgia-Pacific and the union will take place to determine if incentives will be offered to get workers to take early retirement. “If those people move out, then some others can stay,” he said. That may mean some workers in the middle range may be able to retain their employment.
After the layoffs happen in mid-March, a transition team will be on through April to put the shutdown parts of the plant “in a neutral state," Gerald said.
Georgia-Pacific has benefited from several tax incentives over the years for its Louisiana facilities, with most going to the Port Hudson plant.
As recently as December, the firm was promising to create 30 new jobs in exchange for a property tax break on its facilities. The Zachary School Board unanimously approved an Industrial Tax Exemption for the company on Dec. 18, about two months after the state Board of Commerce and Industry approved the tax break. The Metro Council deleted from the agenda the proposed tax break, effectively approving it, and East Baton Rouge Sheriff Sid Gautreaux also approved it. Gov. John Bel Edwards still would have to sign off for the exemption to go into effect.
The Zachary Community School Board unanimously approved a tax break for Georgia-Pacific, relieving the company from paying $2 million in prope…
That tax break was for the $42 million expansion of the part of the plant that makes fine paper, bath tissue and paper towels, said LED spokesman Gary Perilloux. The exemption would be worth $772,000 in the first year alone.
"If changing circumstances mean the company can no longer meet the requirements of the program, then it’s reasonable to anticipate the ITEP contract and corresponding exemption will not go into effect," Perilloux said.
Georgia-Pacific's Ferguson said the expansion had already been completed, and added the company will talk to local and state officials about it. The ITEP program, which gives manufacturers property tax exemptions for capital additions, has stoked controversy in Baton Rouge and elsewhere in recent years. It has gone through multiple rounds of changes since Edwards reined it in nearly three years ago.
The decision to shut down the office paper division was made only a month ago, Ferguson added, months after the company first sought the tax break.
Gerald, of USW Local 1334, said the plant had hired 100 people over the past three months to work in paper production. Those workers “quit good jobs” to come work at Georgia- Pacific, he said.
The company had been hiring recently, Ferguson confirmed, and had been investing in the plant over the past year because it did not know it was going to shut the division down until recently. Ferguson could not say whether any of the workers hired recently would stay on with the remaining 300 workers at the mill.
Georgia-Pacific said it has 1,200 employees at its three Louisiana facilities, which include a mill that makes corrugated boxes in West Monroe, as well as a saw mill in DeQuincy.
In 2010, the company struck an economic development deal with former Gov. Bobby Jindal's administration in which Georgia-Pacific would invest $300 million in the Port Hudson plant to modernize the plant's toilet paper production. In exchange for retaining 1,000 jobs, the company was promised a $3 million tax credit, $300 million in Gulf Opportunity Zone bonds and ITEP incentives.
The firm took advantage of the state’s ITEP program on an almost yearly basis since at least 1998, records show. This year, Georgia-Pacific was exempted from paying nearly $9 million in taxes at the facility, according to tax rolls.
On Monday, it was morning in Louisiana again.
Buxton, the union leader, blamed the layoffs on “bad decisions” by Georgia-Pacific and said the Port Hudson mill used to be the company’s flagship facility. “They just ran it into the ground,” he said. “They don’t fix the things that need to be fixed so they can have good productivity.”
East Baton Rouge Mayor-President Sharon Weston Broome said she met with leaders from the company Thursday as well as the Baton Rouge Area Chamber, Louisiana Economic Development and other groups to "map out a plan of action."
The city-parish and the Louisiana Workforce Commission are initiating the EmployBR Rapid Response program next week to provide job placement assistance, career counseling, workshops and other resources.
"I am encouraged by the swift response by our economic development and workforce partners, and I am confident that we will collectively and effectively come to the aid of those impacted by today’s layoffs," Broome said in a statement.
Zachary Mayor David Amrhein said he hopes the ripple effect of the layoffs at Georgia-Pacific have a limited effect on the local economy. “It’s too early to tell how this will affect us and the businesses in Zachary,” he said. “We’re hoping for the best outcome and that we can come up with some things to help the people affected by this.”