After wooing each other for months, Missota Paper Co. and Potlatch expect to close on the pending sale of the Brainerd mill on a day made for sweethearts.
Missota Paper is paying $5 million for the Brainerd mill. The sale is expected to close Feb. 14. Dan Alexander, Missota Paper president and CEO, said the entire project will cost Missota Paper $24.5 million. Missota Paper has $6 million in equity for the first four to six months of operational costs, plus a $12 million revolving line of credit to be drawn against receivables and inventory. Earlier, the Minnesota Agricultural and Economic Development Board agreed to provide $2 million.
Missota plans to first make paper for reply card inserts in magazines and high-quality paper for advertising. Later, the product line will be expanded to greeting card paper, file folders and annual-report covers.
Missota Paper expects to employ 145 people in the Brainerd mill by March and about 260 people by fall. A draft contract was prepared by the Paper, Allied Industrial, Chemical and Energy Workers International Union.
Marv Finendale, PACE International Union representative based in Superior, Wis., met with Missota owners last Thursday. Missota outlined wage and work rules in a letters of agreement with the union. Alexander said he expects more than 90 percent of Missota employees to be former Potlatch workers. Wages are expected to be about 17 percent less than workers were making before.
"We are pretty close to getting that contract in place," Finendale said, adding there has not been a lot of disagreement between the union and the mill ownership. "We are in good shape and they are in good shape to make this thing go."
In Brainerd, the Job Service took applications for the mill late last month at the National Guard armory. More than 800 people attended. Larry Roulet, Job Service manager for Brainerd, Little Falls and Wadena, said interviews were conducted at the Job Service offices between Jan. 24 and Jan. 29. Some interviews are still being conducted at the mill.
Finendale said by law if 50 percent plus one of the Missota employees are hired from the previous Potlatch workforce and the mill is making a similar product, the union has the right to renegotiate the contract.
Finendale said there will be changes.
"It will be a totally different atmosphere than there was before," Finendale said.
He said there will be a more open attitude with people expected to do more job duties and with employees who are more involved in the mill's success and the process of keeping the mill alive.
"It's our best interest on both sides to make this thing work and do what it takes to make it work," Finendale said. "It's a good opportunity not only for the union, but for the company and the community."
Neither Alexander nor Jim Withers, Missota Paper executive vice president and chief operating officer, could be reached at the mill for an updated comment this morning.
Finendale said no date for a future meeting between the mill and Missota has been set, but he expects they will be getting together to discuss the draft contract now on the table. Finendale said he did not have information on wages as that discussion was still in process.
"If we can get that many people back to work in the area that is definitely a bonus for the community," Finendale said, adding the effort to get those people back to work combines union, mill ownership and the community. "This looks like a positive chance for all three to work together and make it work and be successful and grow that business."
(This story contains information from The Associated Press.)
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