Mar. 7—The Canton paper mill, a mainstay of Haywood County's economy and fabric of life for nearly 120 years, will close by summer.

The devastating news was announced Monday evening by Pactiv Evergreen corporate officials in back-to-back meetings with mill managers. The mill's impending closure — likely by the end of May — came as a surprise to everyone from the top down and from the inside out.

There was no advance notice or coordination with Canton town leaders, county officials or the state job employment agency despite the severity of the announcement that upended thousands of lives — not only the lives of mill workers but those in every corner of the county who will feel the economic ripple effects.

The mill employs around 1,100 workers, with roughly 900 at the main plant in Canton and 200 at the satellite facility in Waynesville. The satellite facility in Waynesville will not be part of the closure for now, but could be on the chopping block down the road as part of a corporate consolidation, according to a Pactiv Evergreen press statement.

The union was also blindsided by the news. Canton Vice Mayor Gail Mull, a retired mill employee who now works at Smoky Mountain Local 507, said the union had no advance notice of the Monday announcement — news that sent employees and their families into a tailspin and has far-reaching tentacles into the region's economy.

For every job lost at a manufacturing plant, another one-half job is lost in the surrounding community, according Waynesville economist Tom Tveidt, owner of SYNEVA Economics

"So you could take the expected job losses and safely say that there is half as many local jobs that will be impacted (lost) as well," he said.

Despite the late Monday news, local government leaders and community partners had mobilized before the night ended to help soften the blow for those whose livelihood is now uncertain.

Canton Mayor Zeb Smathers sprung into action upon hearing the news, from lining up state assistance to notifying county leaders. His first call was to N.C. Gov. Roy Cooper, whose chief of staff offered assurance that state help was available in situations like this.

"I think we'll have plenty of resources," Smathers said, pacing the sidewalk of downtown Canton in between the union hall and mill's corporate office as he worked the phone. "We'll see a full-court press to help people."

By early Monday evening, the county was already working on ways to ease employment concerns of those being displaced.

"Pactiv Evergreen is the region's largest manufacturer. This affects families throughout the region and things are already in motion to offer assistance," Haywood County Community and Economic Development leader David Francis said.

Francis said both the Southwestern Commission and the Land of Sky Regional Council began plans to launch rapid response workforce development procedures already in place to address plant closures.

Smathers called an emergency Canton town board meeting Tuesday afternoon to address the issue.

Troubled times

The paper mill has encountered a number of hurdles in Haywood through the years, from floods to environmental violations to union conflicts.

In August 2021, Pactiv Evergreen dealt with massive flooding along the Pigeon River where it draws water, though it wasn't as bad as the floods of 2004 that prompted a longer plant shut down.

Most recently, a late December cold snap wreaked havoc on water supplies due to pipes cracking from the deep freeze — a problem that was particularly acute within the Canton mill. Water leaks within the mill were draining the town's water supply. Eventually, after the mill didn't appear any closer to getting a handle on its internal leaks, the town "throttled down" the mill's water supply to save the reservoir from being drawn down too far to serve residents.

It underscored problems with the aging infrastructure in the mill.

Late last year, members of Smoky Mountain Local 507 union twice-rejected the wage package offered to mill employees during contract negotiations.

The master union contract applies to Evergreen employees at both the Canton and Waynesville plants, along with those in Olmstead, Ohio, and Athens, Georgia. All units passed this contract, but the wage agreements were voted on separately, said Union President Troy Dills.

While workers at the Canton mill rejected the wage offer portion, the other three locations accepted a flat hourly increase of $1.25 an hour, along with percentage increases over four years that amounted to a 9% wage increase. The wages began upon approval and included back pay from May 2022 when the previous contract expired.

Canton mill workers have been without a labor contract since last summer as a result of the stalemate. The company and union were to re-enter contract negotiations in January, but that hasn't happened yet. With the latest bombshell of the mill closing, it is unknown where the Canton employees will end up.

Dills pledged he would keep fighting for the contract negotiations to be settled despite the impending closure. Any existing labor contract in place would be honored in the slim chance another buyer for the mill comes along.

The mill also had its share of problems with state environmental regulators in recent months after more than a dozen residents complained about dust build-ups on vehicles that proved difficult to remove. The dust problem resulted in three official air quality violations and a fine.

Meanwhile, the mill has been grappling with a shrinking paper industry. In mid-February, Pactiv Evergreen announced it was shutting down the #20 paper machine due to a glut of warehoused paper product for envelopes, writing paper and even textbooks, with sagging demand driving the stockpile of unsold inventory.

A total of 38 employees were reassigned and a memo sent to the union stated there were no plans to idle other machines at the time.

What's next?

As with past plant closures in Haywood County, getting answers to pressing and lingering questions take time.

Meanwhile, there are dozens of community and government leaders working to help sort through the upheaval.

"The mill has been a major economic driver of Haywood County for over 100 years," said CeCe Hipps, president of the Haywood County Chamber of Commerce. "It is of major importance for all Haywood County leaders to pull together and work for the residents of our community. It will not be easy but, with the resources, partners and connections we will assure Haywood County rise above this unfortunate situation."

Fears of a mill closure and the consequence have been a dark cloud on the horizon for Haywood County for years. While it was too unthinkable to speak out, many suspected the day would eventually come.

Last month, a local finance expert reviewed the Pactive Evergreen's financial documents that are readily available online since the company is now traded publicly.

"I would say that given the trajectory of the company over the last several years, this outcome has always been one that was in the cards," said Jesse Fripp, a Haywood resident with 30 years experience in banking, finance and economic development and CEO of Shining Rock Ventures.

Fripp spoke of Pactiv Evergreen's 2020 initial public stock offering that openly outlined a strategy of streamlining, workforce downsizing and unit consolidation.

"There were consistent clues that the Canton unit was unlikely to be a long-term survivor of this process," he said.