You Had a Job for Life Page 24
According to Cecil Tisdale, Wausau appeared in the nick of time: “My supervisor told me when we were talking about Wausau going to buy the place, ‘Now I can tell you. I couldn’t before. If Wausau hadn’t bought this place, in two weeks the doors would have been shut.’ James River was going to shut it down.”
The due diligence team morphed into a transition team. During the transition period Wausau executives observed the bad blood between James River and Groveton Paper Board. Pete Cardin recalled: “This one particular manager for Groveton Paper Board—I won’t say his name—would walk up to other [JR] managers and tell them flat out, right in front of everybody: ‘When we take over, you’re gone.’ When it didn’t turn out that way, those same [JR] people had influence in the Wausau organization. I don’t think that was forgotten. Very bad behavior on our part, to have somebody in there like that.”
Greg Cloutier believed the transition period allowed some JR managers to avenge past humiliations. “There was one accountant [who] was very bitter about Mr. Wemyss because he got fingered a couple of times, probably unjustly—profit-loss numbers. He was also a guy that Mr. Wemyss had used a little bit to play the cost-allocation game between James River and Groveton Paper Board. I think Mr. Wemyss didn’t realize this, but he had kind of baited this guy to go to Wausau and say, ‘You are not getting a fair deal.’ I think that started the process of being totally separate.”
Wausau’s transition team had neither the time nor the patience to mediate this family feud. “When James River left,” Pete Cardin said, “their advice was, ‘Don’t get in bed with Groveton Paper Board.’ That’s what I heard.” Wausau insisted on separate corporations with separate offices. Eventually Wausau painted lines of demarcation on the floor of the mill defining where Paper Board employees could and could not venture.
Wausau informed nonunion employees, primarily office personnel and management, they no longer had jobs. Pam Styles recalled: “Everyone was let go, and then they rehired the ones they wanted. They just said, ‘The company ended; that’s it. You’re done working for this company.’ We all had to put in résumés. They pretty much hired back most of the same people in their same positions. I think they probably started them at about the same pay that they were making.”
Tom Bushey remembered: “You’ve got the whole drama of whether or not you’re actually going to have a job with Wausau because Wausau didn’t want anything to do with running Groveton Paper Board, and they also wanted to sift the wheat from the chaff when it came to the managerial team. It didn’t take too long for a few people to be showed the door, permanently, right out of the building. Wausau came in and offered jobs to the ones that they wanted to keep.”
The due diligence team had devised the mandatory resignation policy. “It was possibly driven,” Atkinson speculated, “by the fact that when Wausau came in, they knew they were only going to run one [fine-papers] machine, and you don’t need the same staffing level to run one machine as you do two.”
Two decades later, Ted Caouette, then superintendent of the paper machines, remembered the period with bitterness: “Wausau, in my opinion, did not do a very good job coming in, particularly to the salaried people. They never told you whether you were going to get hired or not. They said, ‘Unless you get a letter in the mail’ such and such a date before they took over, ‘you’re not hired.’ This went on for, if I remember right, a few months. That was no fun. Everybody was worried. And then finally get the letter and there it has your salary and it was the very same it was before, and what your title is going to be, and ‘Welcome.’ That was, for me, too little too late because they’d already done a bad deed by not telling us, and that stuck with me through the time that I worked there, actually. It was hard on those people, and I’m sure, hard on their families. Some of them didn’t get hired. [Wausau] came in with a bang, and they went out with a bang.”
James River shut down Number 4 paper machine during the transition period, squelching some of the euphoria over the mill’s future. Many blamed Wausau for failing to try to buy Number 4. Dave Atkinson demurred: “James River didn’t sell it.” James River was shedding its fine-papers business so it could concentrate on tissue making. “If they sold it,” Atkinson added, “it would have been a machine that would be competing against them. In some of my discussions with Jimmy [Wemyss], even in the good years of Wausau, [in a funny voice] ‘Why did you guys let that tissue machine go? Arnie Nemirow, if he’d been a better negotiator, he woulda gotten that machine.’ But Wausau at the time had no tissue at all. It wasn’t something that they knew, understood. So they didn’t want it either.”
Murray Rogers, the last president of Local 61, had long shared Wemyss’s frustration over the demise of Number 4 and the scores of lost jobs. When informed that James River had not initially offered Number 4 to Wausau, he was surprised: “Really? OK, so we thought it was Wausau not wanting anything to do with it.”
It had been a traumatic decade for the mill’s labor force. In 1984, a year after James River acquired the Groveton mill, there were approximately 800 employees at the Groveton mill and Campbell Stationery’s North Stratford converting plant. Nine years later, Wausau acquired a mill with 360 employees. Groveton Paper Board, now an independent corporation, employed about 140. Some 300 out of 800 mill jobs had disappeared. Campbell’s, with its roughly 200 jobs, was defunct. Approximately 100 jobs had been eliminated because of the shutdown of Number 4 paper machine and the accompanying reduction in jobs in the tissue finishing room and maintenance.
It was clear that employment levels would never again approach the Wemyss and early James River eras. Bill Astle observed: “[Under Wemyss] it was a case of if you were from Groveton, you always had a job at the mill. By the time James River came it wasn’t nearly as much so. And with Wausau Papers, they could care less where you came from, it was what you brought for skills.”
Before it would sign the final purchase agreement, Wausau insisted on negotiating a four-year contract with Local 61. The union was forced to bargain from a position of weakness. In addition to heavy job losses, the union’s finances were in shambles in the aftermath of an embezzlement scandal. It could no longer pay for arbitration cases or train its officers. It was forced to discontinue a popular tradition of giving each member an Easter ham, and it could no longer contribute to local charities or sponsor scholarships.4
Wausau labor negotiators were accustomed to bruising contract talks with their Wisconsin locals. Dave Atkinson recalled they were “pleasantly surprised” by Local 61’s “huge, huge sense of cooperation and all-pull-on-the-rope-in-the-same-direction” attitude. Local 61, still operating under the contract that had expired in September 1991, was eager to save the mill, while recovering some of the concessions made in the final James River years. Wausau understood the union’s weakness. “I can recollect some conversations, saying: ‘Well, they’ve just been through six or eight really tough years with James River, and we are, maybe, one of their last hopes, so it’s no wonder they’re being friendly and cooperative,’” Atkinson said. “But [the Groveton union] would have been anyway. I knew that; [Wausau] probably didn’t. The union-management relationship that exists in Groveton is much different from what they had seen at Rhinelander and Brokaw.”
After an intensive week of negotiations, Tom Howatt and Local 61 hammered out a four-year deal that granted no pay increases for two years, followed by raises of 3 and 2 percent in the final two years. Web Barnett said the negotiations “went very well. It was hard negotiating; there were a lot of issues to cover.” In March, the rank and file voted 211–43 to accept the tough deal. Barnett, who would shortly retire, said: “I think there are mixed feelings, but at least we know we have a company that will stay with us.”5
Groveton Paper Mill Maximum Hourly Wages, 1946–2006, and Purchasing Power in 2006 Dollars
The chart above shows real wages for the mill’s highest-paid union job—paper machine tender (dotted line) and the purchasing power of wages from 194
6 to 2006, expressed in 2006 dollars, using the Department of Labor’s Consumer Price Index (solid line). A machine tender received $1.27 an hour in 1946 and $20.09 in 2006. In 1946, $1.27 had the purchasing power equivalent to $13.13 in 2006.
Gains in purchasing power were modest under Jim Wemyss Sr. They were steadily higher under Jim Jr. from 1953 to 1968. Under Diamond (1968–1982), with Jim Jr. at the helm, purchasing power also increased steadily, except during the two oil crises of the 1970s. Purchasing power continued to rise under James River from 1983 to 1987 but fell sharply the last five years under JR, especially after JR forced concessions on the union in 1991. Wausau’s first contract kept purchasing power depressed from 1993 to 1997. Thereafter, purchasing power increased, but never again reached the heights of the Diamond and early James River years.
Howatt’s transition team moved to New Hampshire late that winter to begin the mill’s makeover. Wausau assumed formal ownership of the Groveton paper mill on April 1, 1993. “What’s amazing,” Atkinson later observed, “is that on March 31, 1993, we were owned by James River and unprofitable. One month later, with the same equipment, we turned a profit.”6 The first years under Wausau were “the best years,” Atkinson recalled. “The first time in my career it was high energy. The management team that Wausau had was much leaner than the traditional paper mill. Those were long days—fulfilling days.” Wausau astutely promoted Atkinson to paper mill manager. The mill community was delighted that a well-regarded hometown boy was slated to play an important role in the new regime.
“I still remember Tom Howatt walking into the conference room for the morning meeting and just strutting in like he was finishing a race,” Bill Astle recalled. “He was all business. He was a shrewd negotiator; he allowed Wausau to buy that mill for a song. He got all kinds of concessions, and clearly he was the sharpest guy in the room in the negotiations. I remember what a breath of fresh air it was after the lackadaisical days of James River and kind of floating in and out. Basically in the first ten days, ‘You’ve got to do this, this, this, and this. In the first thirty days, everyone here will do this, this, this, and this.’ He even made the observation, ‘Change that doesn’t come within the first thirty days is very difficult to ever initiate, so make no mistake, things are going to change.’”
“Nobody could outwork Howatt,” Astle asserted. “He toured the entire mill every day. He was on a bit of a dead run, but he took it all in. If he’d see something in shipping, he’d take the stairs three at a time, come up to the mezzanine where I was, ‘Bill, what’s all this over here? How do you deal with that? Do we need that here?’ ‘I don’t know. I don’t think so, Tom. It’s always been there.’ ‘If we don’t need it, get rid of it.’ You knew he was paying attention, because if he came through the next day, and it was still there, he’d be three stairs at a time up, ‘What is the reason that’s still there?’ So what it clearly imparted early on was this guy knows what’s going on and makes note of it. By the same token, when everything was as it should be he recognized it, and you were given a leash.”
The stresses during the transition from James River to Wausau were bearable because everyone could see that Wausau was pumping money into the long-neglected mill. In the first four years, Wausau spent $25 million fixing mill infrastructure and modernizing mill equipment, while simultaneously reconfiguring the mill’s paper production, finishing, and shipping operations to achieve its East Coast marketing strategy.7
Tom Bushey, conditioned by James River’s parsimony, was flabbergasted by the attitude of the new owner: “That mill goes from what I see as some very dark days of having no money, to you can’t spend the money fast enough to get that place to where Tom Howatt wants it to be. I can remember going sheepishly to Tom one day asking him for a small amount of money to fix something that under the James River days would be just so taboo to ask for. He was like, ‘Of course. And by the way, I want you to do this, this, and that. And make sure you put enough money in the CFR [capital funds request] to cover these other things.’ So I put it all in. ‘There you go; hurry up and get it done.’ It was unbelievable. You thought $35,000, $40,000 was a lot of money, no—$150,000, $200,000, $300,000, $400,000. It was one project after another under his tenure. You couldn’t get it done fast enough. And if the right way to do it is to spend another twenty grand, ‘Do it; get it done right because we want this place looking good. We are committed to this place. This is going to be the East Coast producer for us.’ Just staggering amounts of money.”
Once Howatt chewed out the frugal engineer: “I remember getting hell from him about some work up in the distribution center. He wanted the place painted. We had spent what I thought was an enormous amount of money painting this thing. He got upset because we didn’t take the time to go up and cut down a bunch of unused old conduit pipe that was up in the ceiling. We just spray-painted over it. We thought we were doing a good thing by trying to control costs. He looked up there and saw that. That didn’t look showcase. That’s not like something that you want to see in a magazine with his company name on it. ‘Get up there and get that down.’ Just mind-boggling. You couldn’t write the projects quick enough. Write the justification, and hang on. We were spending [money] so fast, it wasn’t funny.”
Bill Astle agreed that Wausau spent freely, but he remembered Howatt telling a project engineer, “‘Make sure you come in under budget, because if you don’t, you have go before the board of directors. And I’ll tell you what, it’ll be your one and only chance to be in front of the board of directors because that will be the end of your career.’”
Veterans of the transition from James River to Wausau speak of exhilaration and exhaustion in the early Wausau years. Dave Atkinson said: “It was fun for me because all of the problems and opportunities that employees [identified], ‘Hey, if we could replace the drive on this machine it would be so much better.’ Or, ‘If we could do this to that pump over there,’ or ‘If we could do this to the converting equipment.’ All of those things that took money to do that prior owners didn’t have and weren’t willing to invest. Wausau could see the return.”
“At least in the initial years, Arnie Nemirow gave Tom Howatt complete control,” Atkinson said. “We were so remote from headquarters that there was not a lot of control. Not a lot of approvals needed. In fact, Tom Howatt was, ‘Don’t take stupid risks,’ but it was an environment where risk taking was not frowned upon. It was rewarded. There’s going to be failures, but for every one thing you tried that’s a failure, if you had six successes, then keep going. Keep doing it.”
Wausau began an $800,000 renovation of the shipping department warehouse before it took ownership of the mill because, as Arnold Nemirow expressed it, this project “put capital where our customer connects with us first.”8 The new owner installed a sophisticated computer program in the shipping department for locating, loading, and tracking each item. Shipping received the night’s orders between 3 and 5 p.m., and the loaded trucks would be on the road by 9 or 10 p.m. for next morning delivery. The new shipping facilities were completed in late summer 1993.
Howatt was so impressed by the shipping department makeover that, at the end of the first year, Bill Astle received a large raise: “When Wausau Papers came, jeez, I think my salary doubled within the first year. It was because there were goals that were given to me, and if they were achieved, you were rewarded, and it didn’t matter how cheap they could get you, the attitude was, if you’re worth the money, we need to pay it.”
Although delighted by the raise, Astle thought it represented one of the few times when the normally astute Howatt might have miscalculated: “I think they wrongly assumed that people in Groveton had options, because out in Wisconsin, within a fifty-mile radius there were probably six or seven mills. If you didn’t feel you were getting a fair shake at one, you didn’t need to sell your house and buy a new one, you just changed jobs. But I found them to be a breath of fresh air. The place seemed to be under control again.”
In
its first two years, Wausau spent around $2.5 million to computerize Groveton’s color paper production system. It installed a large holding tank that mixed pulp and the desired dye mixture, computerization that allowed for more exact color mixing, and scanners at the dry ends of the paper machines that continually checked the color of paper taken up on the reel.
Dave Atkinson said the new color scanners dramatically speeded up production time and reduced waste: “This color scanner is reading: Is the paper blue enough? Is it green enough? Is it too red? Improving the paper mill so you could go from blue to green in fourteen minutes instead of seventy-two minutes that you’re making waste. That’s very costly. All those raw materials, all those things you’re using—energy, steam, fiber, dyes—if you only make fourteen minutes worth rather than an hour and ten minutes worth, you’ve improved your cost effectiveness greatly. That’s what color scanners did.”
Lolly LaPointe, superintendent of the stock preparation department, oversaw the process of switching from dry, powdered dyes to all-liquid dyes: “When Wausau came, I think they done some great things with colors. Real deep, deep colors. Very, very top-quality stuff. They had a little niche for that stuff. When Halloween came around, you were doing all kinds of orange, black, and Christmas, your red, your green.”
Groveton began producing Astrobrite colored papers on June 30, 1994. Atkinson noted proudly: “Tom Howatt said to me the most efficient, cost-effective, highest-quality producer of Wausau Papers text and cover Astrobrites was the Groveton mill. In fact, we had to mess up the formation, which is one of the measurements you do to make paper, because when we made ‘Rocket Red,’ it looked so much better than Brokaw’s Rocket Red. Because the distribution centers got both, we needed to make ours look more like theirs. So we had to—I call it ‘dumb it down’ on a few grades.”