SMART Papers for sale; 200 jobs at risk

HAMILTON — The city may lose more manufacturing jobs as SMART Papers announced Thursday it’s selling the business or closing up shop.

Employees there were given notice the company will begin winding down operations now and will cease operations by the first quarter of next year. At stake are about 200 jobs, as well as tax and utilities revenue for the city.

The paper mill, which started operations on North B Street more than 100 years ago, has entered an agreement with Hilco Industrial of Michigan to look for a buyer for parts or all of SMART Papers’ business, said Tim Needham, chairman of SMART Papers.

“They will help us do a wind-down of the business over the next six to eight months,” Needham said. “We will close down parts of the business that don’t sell.”

Until then, production of paper will continue in order to fill customer orders, he said.

Needham said in a statement that the potential closing “is not a reflection on our dedicated, hard-working employees who remain committed to manufacturing the finest coated printing, label and packaging papers in the world.”

“Unfortunately, the continued U.S. economic slowdown has intensified the effects of reduced commercial printing demand,” he said.

Needham cited other factors, including “the rapid expansion of low-priced Asian coated paper manufacturing, the increased costs of raw materials and chemicals, and the uncertainty on cost requirements of pending EPA legislation.”

SMART isn’t the only paper maker hurt by the changing industry and economic conditions. Mohawk Fine Paper of Hamilton temporarily laid off 45 employees on Sept. 12, according to the city manager. Franklin Boxboard in Warren County closed in August.

Proposed federal legislation that passed the U.S. Senate this week is aimed at saving American manufacturing jobs by addressing Asian currency manipulation. The Currency Exchange Rate Oversight Reform Act of 2011 would give the Obama administration stronger authority to pressure the Chinese government to value their currency more fairly, according to the bill’s sponsor U.S. Sen. Sherrod Brown.

Brown visited SMART Papers in 2010 as part of a “Made in Ohio” tour and has lobbied to get tariffs put on imported Asian paper in an effort to make American manufacturing companies more competitive in the global market.

In a statement released Thursday, Brown vowed to help find a buyer for SMART Papers.

“The Senate this week took a big step towards addressing subsidized Asian exports by sending a bipartisan bill cracking down on currency manipulation,” Brown said. “Unfortunately, countless companies like SMART Papers are falling victim to years of inaction and unfair trade policy, resulting in massive job and trade deficits. I’m committed to helping SMART Papers find a buyer, and fighting for companies like SMART Papers and will work to keep good-paying manufacturing jobs in southwest Ohio.”

Though a glimmer of hope remains that the paper mill will be bought by another company and continue operating, employees were “in a state of shock” that they could be out of a job as early as January, said Paul A. Houston, president of the employee union there, United Steel Workers Local 1967.

“My heart goes out to the members because there’s no jobs in this county, there’s no industry, and we all have families,” said Houston, who has worked at the mill for 43 years. “There’s a lot of concern about the unknown. How are they going to feed their families? People are going to lose their houses over this.”

Champion Paper was started in Hamilton on April 15, 1894, according to a historical marker in front of one of SMART’s buildings on North B Street. By 1910, it was considered the largest coated paper mill in the world, according to the marker.

The paper mill was strong in the 1960s, when Houston began working at the mill. During that time, Champion Paper employed about 2,500 people, operating four mills and nine paper machines, he said. The company was sold to International Paper in the late 1990s, then to SMART Paper about 10 years ago.

Significant layoffs occurred in 2009, when SMART sold part of its production lines to Mohawk Papers, and operations were reduced to one active paper machine, Houston said.

“In the back of your mind, you see the equipment being shut down over the years, you see the handwriting on the wall. But still when it happens, you’re in shock,” he said. “It’s a sad day when they finally shut the doors here.”

James Johns, a candidate for City Council in the upcoming election, retired in 2002 from working at the mill for more than 37 years. He remembers when the plant was self-sufficient, fabricating and maintaining equipment, and overtime was aplenty.

“(The paper mill) was good to me. Bought my home. Fed my family. Put my children through school. We weren’t rich but we weren’t poor either,” Johns said. “Things were really good back then. Of course the city of Hamilton was in good shape too.”

City Manager Joshua Smith declined to comment for this story. An official said SMART Papers had a tax abatement agreement with the city, in which jobs are pledged in return for a tax break, but that agreement expired in 2006.

Without SMART Papers, Mayor Pat Moeller said the impact to the city includes some loss in payroll tax revenue, but also the loss of a large utilities customer.

Moeller acknowledged Hamilton’s rich history in the paper-making industry, but highlighted other ongoing manufacturing activities.

“While we’re disappointed by the possible shutdown, the city has received a few blows over the years and we always seem to get right back up again,” Moeller said. “That’s the spirit of this city.”

Employees said Thursday the move was expected.

Employee Jim Crook of Hamilton said it wasn’t a surprise because major repairs were being put off and people were tight-lipped on the situation.

“I saw the writing on the wall,” said Dave Roach, of Hamilton, who has worked for the paper manufacturer 32 years.

Roach said business has been down for the past 10 years, and in 2004, the largest paper machine he worked on closed.

“That’s when you knew,” he said. “It is what it is.”

Outside the plant after work Thursday, another employee who has worked for the company for nearly four decades said, “Ain’t nothing you can do, you know.”