Allegany paper mill losing about 150 jobs

Reductions continuing at the new MeadWestvaco

October 11, 2002|By Paul Adams | Paul Adams,SUN STAFF

MeadWestvaco Corp.'s paper mill in Allegany County will lose about 150 jobs as part of the Stamford, Conn.-based company's continuing effort to eliminate 2,500 positions before the end of the year.

The job reductions are the latest in a series of cuts that began in January after Dayton, Ohio-based Mead Corp. merged with Westvaco Corp. in a $3 billion deal that company officials said would result in $325 million in cost savings.

The company plans to shut down eight machines that convert giant rolls of paper into sheets and move the majority of that work from its factory in Luke to Chillicothe, Ohio. The Ohio plant would add machinery and shifts, resulting in a gain of about 50 jobs there.

"This sheeting consolidation is going to allow us to be able to fulfill our sheeting demand with fewer employees and also allow us to maximize our production on some existing equipment we have in the system," said Laurie McFarlin, a spokeswoman for the company.

A representative of the Paper, Allied-Industrial, Chemical and Energy Workers International Union, which represents workers at the Luke plant, was not available for comment yesterday.

The Luke paper mill has about 1,450 employees, about 1,000 fewer than in the late 1960s and early 1970s.

MeadWestvaco, which produces paper used in such things as magazines, textbooks, food labels and business receipts, will incur a pretax charge of about $6 million related to the cuts.

The company reported a second-quarter loss of $8 million on sales of $2.01 billion. Excluding restructuring and merger-related costs, the company had a second-quarter profit of $13 million. That compares with a profit of $24 million posted for the second quarter of last year, when Westvaco operated independently and had sales of $990 million.

This isn't the first time the company has cut back in Maryland since the merger. About 50 positions were eliminated at the Luke plant in March after a paper machine was shut down. In that instance, the reductions were accomplished through attrition, rather than layoffs.

The company also cut more than 60 positions at its research and development facility in Laurel as a result of the merger. It's unclear whether there will be more job reductions in Maryland this year. The company has more than 30,000 employees worldwide.

"This is one of those instances where you can never say never," McFarlin said. "Right now, we don't anticipate any other major changes."

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