Two tiny bright spots on mill front: union wins pay concessions and hope for Waynesville plant
Mar. 31—Good news has been hard to come by since the announcement of the Canton paper mill closure, but two silver linings have emerged this week for the first time since the devastating news nearly four weeks ago.
Bargaining negotiations between the United Steelworkers labor union representing mill workers and Pactiv Evergreen concluded Thursday, and the agreement has scored workers a better deal and more parting compensation than previously hoped.
"Any time you have a plant shut down or a mass layoff, there's nothing anybody can do to make it better," said Daniel Flippo, a regional director for the United Steelworkers who led severance negotiations on behalf of the local union. "The best we can do as a union and as a labor organization is try to get as much as we can for our members during this difficult time."
A testament to the power of unions, mill workers will get a tidy retention bonus in addition to their severance pay for anyone who stays on through June 9.
Meanwhile, there is newfound hope that the Pactiv Evergreen plant in Waynesville isn't a goner after all. While the company has no plans to sell the Canton paper mill when it shuts down, a sale could be in the cards for the Waynesville plant.
"My understanding is that the Waynesville plant is being marketed," said David Francis, the economic development coordinator for Haywood County.
This would open the door for another manufacturer to assume operations and keep it in business. Francis said that is a good sign.
"Some dominoes are falling, but let's see if we can stand some of these dominoes back up," Francis said.
Fate of the Waynesville plant
Workers at the Waynesville plant received blanket lay-off notices in the mail last weekend informing them their last day would be June 9 — the same as mill workers in Canton. The mass lay-off notices led Waynesville workers to believe they were being shut down also, since everyone has the same last day.
Enormous rolls of paper travel by rail from the Canton mill to the Waynesville plant to be coated for liquid cartons, coffee cups and ovenboard. Without an inventory of paperboard coming out of the Canton mill, Pactiv Evergreen no longer has a use for the Waynesville plant.
However, the company won't be shutting down completely on June 9 after all. It will keep a skeleton crew on board as it searches for a buyer, according to the latest information.
The Waynesville plant would dramatically curtail is existing three coating lines, however.
"I believe their plan is to keep one line open at the Waynesville site," said Flippo.
Pactiv Evergreen could keep as many as 40 to 50 of its 200 workers, according to a notice filed with the N.C. Department of Commerce. Companies doing mass layoffs are required by law to submit a Worker Adjustment and Retraining Notification — known as a WARN notice — stating the number of workers losing their job.
Pactive Evergreen's WARN notice submitted to the state lists 900 lay-offs for the Canton mill, which is essentially the entire workforce. But it only lists 150 lay-offs for the Waynesville plant.
A few weeks ago, that would have amounted to about a quarter of the Waynesville plant's workforce. But some workers have quit since then to take other job offers rather than wait around to see how things will shake out. A memo shared by managers with workers at the Waynesville plant said about 40 would be staying on.
Confusion caused by the lay-off notices giving all workers a last day of June 9 is a result of WARN notice requirements. By law, the company is required to give workers a 60-day minimum notice of their lay-off date.
"They give that blanket notice to cover themselves under the law," Flippo said.
Which employees would stay on beyond that is determined by seniority, per the terms of the union labor contract. That will be sorted out in coming weeks.
"They have to notice everybody out, then they go back and negotiate which people are staying based on seniority and years of service," Francis explained.
Presumably, company officials will go down the list of workers by seniority and see who wants to stay on until the number of remaining jobs are filled.
Word spread quickly among mill workers Thursday evening over the outcome of labor negotiations between the union and Pactiv Evergreen. While the agreement has been signed, the union has not publicly announced the results, pending packets going out to every employee.
However, several employees shared what they'd learned with The Mountaineer. The newspaper has also obtained a copy of the "shutdown agreement" arrived at between the union and the mill. Here are some top take-aways.
The severance pay came as no surprise: one week of pay for every year they've been on the job, per existing terms of the labor contract. Also of note, the week of pay will be calculated as a 44 hour work week. The mill had wanted to pay a rate equivalent to a 40 hour work week, and the union had lobbied for a 48 hour work week.
A major win, however, was scoring an overdue raise of $1.25 an hour that will be back-dated to last May.
The back pay will come in the form as a retention bonus for workers who stay through the last day of June 9 — presumably to stem the tide of workers who've been leaving to take new job offers while the getting was good.
The labor contract for Canton mill workers expired last May after the union and Pactiv Evergreen reached an impasse over wages. Canton mill workers twice-rejected a wage package offering a flat raise of $1.25 an hour.
During severance negotiations, the previously rejected raise of $1.25 an hour raise was back on the table. The raise will go into effect next week and remain until the employees' separation date — June 9 at the earliest.
In addition, back-pay of $1.25 an hour for hours worked since last May — when the old contract expired — will be paid as a lump-sum retention bonus if they stay until June 9.
Some workers will remain through the wind-down phase, however.
"There will be a small group of people working until October," Flippo said.
Who gets an offer to stay on will once again come down to seniority. Anyone who stays until at least June 9 will be able to claim state benefits and cash in on their severance and retention pay, however.
The negotiations were spearhead by Flippo, the director of a seven-state region of the United Steelworkers union. The local chapter, the Smoky Mountain Local 507, was placed under administratorship of the district due to the pending closure.
That's largely due to logistics to ensure continuity and labor representation during a critical time, as union officers could be among those who leave early, creating vacancies in leadership.
"When there's a shut down, you have people leave for other job opportunities as it winds down, and you can have officers leaving, and opposed to having elections to fill posts, we put the local under administratorship to run the affairs," Flippo explained.
The bright side is bringing in the regional district office meant having more expertise at the bargaining table.
"I hate to say we have expertise because that means we've had to deal with plant closures — and we've had way too many closures," Flippo said.