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Councilor: Mill Needs Local Control

September 12, 2008

By NICK SAMBIDES JR.; OF THE NEWS STAFF

MILLINOCKET – Referring to the indefinite shutdown of the Katahdin Paper mill as “totally unnecessary,” Town Councilor Scott Gonya on Thursday called upon mill parent company Brookfield Asset Management to name former mill Manager Serge Sorokin chief executive officer of Katahdin Paper.

The idea was Gonya’s latest in his fight to keep the mill operational. The facility ceased production on Sept. 2 when cleanup operations began. While 208 employees will be laid off as the cleanup winds down, Gonya is among the first nine mill workers expected to be laid off by Saturday.

The councilor said Thursday that he has “several things going” that he didn’t want to discuss, which might force BAM to reopen the mill.

“This whole thing doesn’t make any sense,” Gonya said during Thursday’s council meeting. “I think in our next meeting maybe we should come up with a resolve and send it.

“We need Serge Sorokin to be CEO of Katahdin Paper,” he added. “We know this man would fight for us. [But] He is everything but out the door.”

BAM spokespeople were not available for comment at press time. Mill officials have said that Sorokin is selecting a team that will manage the installation of a biomass boiler at the mill and assemble a plan for the mill’s rebirth that the BAM board of directors will review.

“We need to get a hold of the parent company and we need another shot at this,” Gonya said.

He called Sorokin “somebody with the Katahdin region’s interests at heart … There is nobody who is going to salvage these two mills and do a better job than him.”

Katahdin Paper also runs East Millinocket’s mill and doesn’t have a CEO, Gonya said. That mill will remain operational, BAM has said.

Gonya believes Sorokin’s new position working on the biomass plans and the transfer of mill supervisors to East Millinocket show that the mill will not reopen in 2009. Gov. John Baldacci has said he would hold BAM to its promise to reopen the mill, if feasible.

“I hope it happens,” Gonya said, “but I don’t think it will.”

Responding to BAM claims that the mill has lost at least $57 million since 2004, Gonya said that Fraser Papers has charged Katahdin Paper more than $40 million since then to manage the mill despite both companies being subsidiaries of BAM.

“The town paid $9 million through [tax breaks] and we hear nothing, no communication from [Brookfield Asset Management]. I think they owe us an explanation,” he said.

The Toronto-based management firm, which has about $95 billion in holdings in Europe and North and South America, announced May 29 that it intended to shut down the mill in 60 days because of its prodigious oil use. The mill burned about 400,000 barrels in 2007.

Baldacci intervened and the mill satisfied customers guaranteed advance orders and took significant energy-saving measures, which helped keep the mill going. But on Aug. 26, BAM abruptly ordered the mill shut down indefinitely effective Sept. 2, saying it lacked orders and was losing money.

Council Chairman Wallace Paul declined Thursday to characterize Gonya’s resolution proposal as a symbolic gesture.

“We will have to wait for the resolve and see what it has to say at this point,” Paul said, “and then see what impact it might have.”

Town Manager Eugene Conlogue is expected to write the resolve, possibly by the next meeting for council review.

Councilors seemed all right with the resolve proposal, but McLean and Councilor Matthew Polstein cautioned against wording it in an adversarial manner.

Councilor Bruce McLean questioned whether Gonya intended to press his proposed eminent domain seizure of the mill’s major electricity- generating components. Not yet, Gonya answered.

“That’s probably five steps down the line,” he said.

(c) 2008 Bangor Daily News. Provided by ProQuest LLC. All rights Reserved.