WAUSAU WAS A LEAN and hungry company looking to expand. Wausau’s executives had very much liked the Groveton mill when they visited in January 1991. With the proper investment, they believed, Numbers 3 and 6 paper machines could produce the colored, premium fine papers Wausau specialized in, and Groveton could give the midwestern firm an entrée into lucrative eastern markets. Wausau’s Rhinelander, Wisconsin, mill produced pressure-sensitive labeling, packaging papers, and technical papers. Its mill at Brokaw, Wisconsin, turned out specialty printing and writing papers, 65 percent of which were colored papers. The Brokaw mill was running at full capacity and could not keep up with orders. Early in 1992, Wausau’s board of directors had authorized CEO Arnold Nemirow to spend $100 million on a new paper machine and related mill expansions for Brokaw.
Around that time, a senior vice president of James River contacted Nemirow and told him the Groveton mill was on the verge of shutting down. He urged Wausau, Groveton’s best customer, to take a second look. Jim Wemyss had also renewed his courtship of Wausau: “I went out and saw [Nemirow] again and said, ‘They’re getting worse by the hour. It’s terrible.’ They were going to junk the mill practically. Shut it down. He flew in and met them, and then I took him out to my house for lunch, and I said, ‘You’ve got to move, now.’ And I guess he did.”
Dave Atkinson had started work at the Rhinelander mill on June 1, 1992. In August of that year, as he recalled, Arnie Nemirow telephoned him: “He said, ‘Dave, I’m calling to see if you would be interested in being on the due diligence team. We’re looking at the mill in Groveton, New Hampshire. I understand that you used to work there.’ Of course I was a nervous wreck; the CEO’s calling. I said, ‘I only started here two months ago. I’ll have to check with my boss,’ ‘Don’t worry, Dave. I’ve already talked with them; they know I’m talking with you.’ I don’t think I even knew then what due diligence meant. I said, ‘Yes, I would be interested in that.’ My contribution was knowing an awful lot about machines, the people, the culture, the capabilities of the operation. I wasn’t involved in ‘What are they going to pay?’ Just ‘What is it capable of?’ Wausau was pretty much a regional supplier—Chicago, Minneapolis, St. Louis, Denver, and wanted to repeat what was successful for them in the East. That was the reason they bought Groveton.”
In October, James River cut the running time for its two fine-papers machines to five days a week, and it laid off one of the four paper machine crews, calling it a “temporary layoff” of twenty employees. The following week, another nineteen workers were laid off for at least a week as Number 6 paper machine shut down.1
The due diligence team, led by Wausau vice president Tom Howatt, concluded the Groveton mill was a good buy for Wausau. On October 28, Wausau Paper Mills Company announced it was buying the fine-papers operation at Groveton for $20.2 million, one-fifth the amount authorized for a new paper machine for Brokaw. Wausau would own no timberland and would continue to purchase pulp from Berlin, Old Town, and other mills. Groveton gave Wausau twice the mill capacity of its planned expansion, and the $80 million in savings allowed Wausau to invest heavily in Groveton. The editors of PaperAge were so impressed with the transaction that they hailed the deal as the “buy of the decade” and named Arnold Nemirow 1993 paper industry “executive of the year.”2 PaperAge was especially awed by the maintenance of the Groveton mill. “Even the windows on the hooded dryers were sparkling clean,” editor and publisher Jack O’Brien later marveled. “Have you ever seen that in a mill? Unbelievable maintenance.”3
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 1946 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.”
When Wausau bought Groveton, it ran only the venerable Number 3 paper machine because it was more versatile and reliable than Number 6. Wausau renamed the eighty-five-year-old machine “Number 5” so as to avoid confusion with its Number 3 in Wisconsin. (This caused Groveton Paper Board to change the name of “Love in the Afternoon” from “Number 5” to “Number 1.”) Joe Berube, a machine tender on old Number 3, marveled at the variety and quality of the paper he helped produce: “We made over five hundred grades of paper, which is the most grades of any paper mill in the world at that time. We made printing papers, writing papers, computer papers, advertising papers, index cover grade papers. In all different finishes. Over a hundred different colors probably. These real bright neon colors would pull your eyeballs right out of the sockets; they were so bright. They were used in advertising to get people’s attention.”
In the first eighteen months, Wausau operated Number 6 for only a month and a half. Atkinson said, “The runability of Number 6 paper machine was horrendous. Very challenging machine to keep the sheet threaded, to keep it running all the time. Tears and breaks. Any little upset on the machine’s system, and there would be a break. The drive control was 1970s vintage.” James River refused to upgrade it. In 1995, Wausau installed a new drive system for the Queen of Diamonds: “I think it was a two and a half million dollar capital expense. That made Number 6 as good a machine from runability and predictability standpoint as what Number 5 was in the last few years.”
Ted Caouette appreciated Wausau’s investment in production: “They were focused on making paper. ‘What do we need to make better paper?’ So now, you’ve got new equipment coming in. Everybody was, I think, tending to their job better because the focus was on production. I think [Dave Atkinson] did a very good job when he was managing the paper machines, but he was doing such a good job, they asked him to do a lot of other jobs, and the focus got lost in the shuffle. Not instantly, but over time. He still did a good job. He did a good job whatever he did.”
Atkinson saw things differently. “We certainly grew in the early years—’93 to ’95 or ’96—when I was truly paper production superintendent. That is when we developed tons of different grades and became much more efficient at doing it and really honed in on those things; but then we came to a point where the development work, learning to make the Wausau family grades, was done. Now it was a question of maintenance and some of the other things that needed to be worked on. I think that is when my responsibilities were broadened to overall production superintendent, so now all of a sudden I had finishing operations under me. [The production crews] were very good at what they did, and it was very easy to say, ‘OK, I’m going to focus now on the finishing operations. That’s where the efficiency gains need to be had. You guys are going to handle [production] well.’ And they did. There was never a slip-back.”
In July 1994, Wausau’s president and CEO, Arnold Nemirow, resigned to take over Bowater, a much larger corporation that specialized in newsprint. During his four-year tenure, Wausau’s income had increased 42 percent.9 Late in 1994, Tom Howatt was promoted to vice president and general manager of Wausau’s Printing and Papers division, and he returned to Wisconsin after less than two years in Groveton. Tom Craven, head of purchasing, succeeded Howatt.
Wausau was not happy with Groveton’s wood chip boiler. In 1994 the company had conducted a three-month study on the feasibility of converting the mill’s Number 1 boiler back to oil. At the time, wood chips were eighteen dollars a ton. The mill’s appetite for chips pumped $3 or $4 million into the local economy, and according to timber industry estimates, 225 logging jobs depended in part or entirely upon supplying the mill with chips. The mill ceased using wood chips on April 29, 1997. The decision, made in Wisconsin, was based on the relatively low cost of oil at the time and the higher maintenance and capital costs required by a wood-chip-burning boiler.10
Portland Natural Gas Transmission announced plans in 1996 to construct a pipeline from western Alberta that would run by the mill on its way to Portland, Maine. Wausau signed a twenty-year agreement to purchase natural gas to power the mill. The conversion to natural gas at the mill was completed by September 1999. Initially, the mill paid $3.50 for a million Btu’s (one dekatherm) of natural gas. Tom Craven characterized natural gas as a “cost competitive fuel alternative to oil.”11
Jim Wemyss, one of the largest private timberland owners in New Hampshire, was infuriated by the switch from chips to oil to gas: “It was a beautiful wood-burning boiler. Then some geniuses got the idea to start burning gas because the gas line went through. I had nothing to do with that. I would never have allowed it. We’re in the woods business. Let’s stay with it.”
Four years into the Wausau era, the mill was profitable and making some of Wausau’s highest-quality paper. As the 1997 labor contract negotiations approached, union leaders were determined to reverse concessions they had made to James River and Wausau and share in the mill’s profits. Wausau had just enjoyed record second-quarter shipments and earnings, and the union reminded Wausau of its 1993 pledge that if Groveton was profitable, “concessions would not be sought and future contract settlements would be competitive.”12
Late in January 1997, the rank and file rejected Wausau’s first offer by a vote of 263–63, even though union leadership had recommended acceptance. Union president Richard Goulet warned, “The plant is tense.” Union members complained that workers at the Otis, Maine, plant, acquired by Wausau in February 1997, earned $16 per hour versus $12.49 in Groveton. The union argued that the disparity in wages paid in other mills would widen under Wausau’s proposal, and it demanded an additional thirteen cents an hour increase for each of the five years covered by the contract.
Dave Atkinson explained Wausau’s 1997 negotiating stance: “It isn’t just wages, it’s the overall operation of the mill. I can remember: ‘How come they’re making $2.50 more an hour than us? We’re doing the same thing.’ My response was, ‘Hey, the cost of living is different. Look at what they’re spending here.’ I probably said to many employees: ‘I hear you, but if you’re expecting a $2.50 an hour increase, then you’re going to be disappointed. That’s why you negotiate.’ He added that periodically “out-of-contract adjustments” were granted to some employees.
When I pointed out that Groveton was the lowest-paid paper mill in the country, he responded: “You know why? Each contract that got bought and sold was because of Jimmy [Wemyss]. It stayed that way for whatever reasons. I’m not knocking Jimmy at all, but the wage scale—the base started somewhere.” The concessions to James River and Wausau had exacerbated those pay discrepancies. Nevertheless, the average weekly wage of Northumberland residents, $621, was significantly higher than that in any other neighboring town.13
In March, by a vote of 211–117, with 34 abstentions, the rank and file rejected a second Wausau offer that raised wages 16 percent over the duration of the five-year contract. The Berlin Daily Sun reported “a number of votes against the contract yesterday were voided because comments were written on the ballot.”14 Murray Rogers confirmed my suspicion that the comments had been obscenities.
A day later, the union voted 195–165 to go on strike, but since a strike vote required a two-thirds majority, the vote failed, and, by default, the contract was accepted. Union president Goulet bitterly complained: “The contract in no way was accepted by the workers. They have to accept it because it was shoved down their throats.”15
In 1997, at the union’s request, production workers, but not maintenance, finishing, or shipping employees, went on twelve-hour shifts that began at 7 a.m. and 7 p.m. Each of the four crews would work either three or four days consecutively, then be off for three, seven, one, and three days over the course of four weeks. Each crew would work seven days on the day shift, seven nights on the night shift, and enjoy a total of fourteen days off. Most younger workers liked the change. Joe Berube, a veteran of more than thirty years by then, grumbled, “That was another thing that was wished upon us.” Some of the shift supervisors and tour bosses also resented the change because, as management, they had no say in the union vote for the twelve-hour shifts, but they were now required to work those longer shifts.
In February 1997, Wausau bought Otis Specialty Papers in Jay, Maine, for nearly three times what it had paid four years earlier for Groveton. Steve Schmitt, a vice president of Wausau, said, “We intend to grow through acquisition.”16 That December Wausau merged with Mosinee Paper Corporation, a firm that specialized in making tissue paper—an irony not lost on Grovetonians still smarting from the loss of Number 4 paper machine. The new corporation, Wausau-Mosinee, employed thirty-five hundred workers at nine facilities.
The debt incurred by these moves, combined with troubling trends in the paper industry, such as rising pulp and energy prices, low commodity paper prices, and mill closings and downsizings around the country, ended the free-spending days of Wausau’s first four years in Groveton. The new mantra became “cut costs.”
Early in 1998, Wausau announced one cost-cutting program—a generous early retirement buyout to employees age fifty-five and older. Dave Atkinson explained the corporation’s rationale: “There needed to be a downsizing. Groveton was right-sized. Brokaw, Rhinelander, and the other [Wausau] mills were way overstaffed. Groveton was able to produce 330 tons a day on two paper machines with a paper machine crew size of five. Why do [other mills] have sixth hand, seventh hand, beater room helpers? The Wisconsin mills, I think, didn’t really like the Groveton mill all that much. [Our workers] really were a high-performing work team.”
A consultant proposed the “voluntary early retirement package” (VERP) that included severance pay, retirement and medical benefits, and a financial bridge until the retiree became eligible for Social Security. It would be paid as a lump sum that extinguished the employee’s future pension claims against Wausau (but not against James River).17 Some employees received $150,000–$200,000.
Labor law required that Wausau offer the early retirement package to workers at all its mills, not just its Wisconsin mills. The company expected half of those eligible to accept VERP. When 98 percent opted for retirement, Wausau fired the plan’s authors and paid out a great deal more money than anticipated. All but two of the 104 eligible Groveton workers accepted the buyout. One of the men who declined had two or three ex-wives. “Why aren’t you taking it?” Atkinson asked. “He said, ‘Oh, Dave, I’d end up with none of it, so I’m going to keep working. They’re going to have to wait for it.’”
The union reluctantly acquiesced to the buyout. “It was pretty much indicated that if they didn’t get ’em from the upper age group, they were going to cut manning, and it would be in the bottom,” Murray Rogers said. “Our take was: Let the older people go if they want to go. We’re going to need the younger people to run this thing. You get an aging workforce, it’s going to catch up to you. That buyout was a blessing for some because they were, I’d say, beyond their peak on ability and things of that nature, especially maintenance guys.”
Initially, the buyout hurt Groveton. “It was a major mistake on Wausau’s part,” Ted Caouette asserted. “It was good for the guys who could retire and get out of the mill. But it was very difficult for years to come to get that experience back. Jobs weren’t being automatically filled by experienced workers. After a while, it got better. For us, it was not a disaster, but it made everything very difficult.” Customer complaints about poor-quality paper jumped in the fall of 1998 and remained very high for the next six months. February 2000 was the worst safety month in fifteen years.18
Atkinson acknowledged the mill suffered from the loss of experienced workers. But, he noted: “It created tremendous opportunities for some of the younger workers. I know that we recovered pretty quickly from it. [Younger workers] were open to trying newer things. You were a much quicker operation. More nimble, which you need to be.”
The buyout was a good deal for the people who took it, but many of them invested in the stock market, and the 2007–2008 market crash hit them hard. Fred Shannon was one who lost his buyout money. When I reminded him in 2010 that the market was recovering, he replied: “It’s too late for me.”
Although Wausau had saved the Groveton mill, there was a dark side to Tom Howatt’s dynamic leadership. Dave Atkinson called Howatt a wonderful mentor but conceded, “I never considered him a resident. He built a home in Littleton,” a half-hour drive south of Groveton. Bill Astle said, “He was an upwardly mobile guy. He didn’t want to end his career at Groveton. He was looking to be CEO.”
During the transition period, Louise Caouette sensed the incoming management team—with the exception of Dave Atkinson—did not place a high value on community relations. She was especially troubled by Tom Howatt’s attitude toward fraternization between management and labor at the mill: “One of the things that was told to me was, ‘There won’t be the socialization between the upper ranks and the lower ranks.’ It challenged a lot of relationships. Everybody sort of bought on because everybody was glad to still have a job, [but] it was uncomfortable. It hurt relationships. In the mill, social things became strained.” She added that after Howatt was promoted and returned to Wisconsin in late 1994, this policy was relaxed, but “by that point, a lot of damage from an emotional standpoint had already happened.”