Duluth gets $285,000 grant to assist Georgia-Pacific workers; offer for plant site rejected

Duluth Mayor Don Ness said Georgia-Pacific has hindered the city’s efforts to find a new occupant for the company’s hardboard plant that closed earlier this year.

Dwight Wickstrom, 56, of Esko, who worked at Georgia-Pacific for 37 years as a maintenance planner, describes how much he appreciates the opportunity to be retrained thanks to a $285,000 grant by the state of Minnesota to Duluth Workforce Development. Wickstrom and other workers attended a news conference at City Hall on Friday, Nov. 30, 2012, along with Mayor Don Ness (not pictured) and Don Hoag (center), manager of Duluth Workforce Development. (Bob King / rking@duluthnews.com)

The comments came during a news conference to announce a state grant the city received to help displaced workers of the shuttered facility. The $285,000 grant from the Minnesota Department of Employment and Economic Development will help the city and Duluth Workforce Development provide professional re-employment assistance for up to 80 of the 141 workers who lost their jobs when the plant began its shutdown in August and want to return to the workforce.

Ness said a “local company” made an offer to buy the plant.

“We’ve been discouraged with some of the lack of cooperation that we’ve seen from GP. I know that the employees are discouraged on that front as well,” Ness said. “And if GP has closed the door in operating on that site, well then we want to shift our focus and encourage them to allow somebody else to come in and use that site to put it to productive use.”

Anna Umphress, a spokeswoman at Georgia-Pacific’s headquarters in Atlanta, told the News Tribune today that the company rejected the local offer to buy the plant.

“GP has discontinued talks with the local group. The offer we received was well below the value of the property,” Umphress said. She and Ness didn’t name the company involved. “We understand the city’s interest in finding an owner. We are in discussions in other parties.”

The Duluth plant made a thin hardboard product called Superwood that’s widely used in the auto industry for interior parts like visors, door inserts, rear shelves and spare-tire parts. It opened in 1948 as a locally owned Superwood Corp. Georgia-Pacific bought the company in 1987. Koch Industries became its parent company in 2005.

Georgia-Pacific decided to close the plant to “optimize” business based on its long-term product strategy, company spokesman Eric Abercrombie said in August. The Duluth operations closed Oct. 19.

The plant’s manufacturing has since been shifted to Georgia-Pacific’s other facilities.

“The equipment and the plant that’s in place could be used for a similar operation,” Ness said.

In October, Umphress said Georgia-Pacific won’t sell to a similar company.

“We made it very clear we would not be willing to sell the plant to a competitor,” she said.

Ness said Georgia-Pacific should realize the impact its decision to close the plant has had on the Duluth community and what a once-again-productive site would mean.

“The more conditions that GP puts on its sale, the more difficult it is to put it to productive use,” he said. “So, we’re encouraging GP to have as few restrictions as possible so that we can get it into the hands of an owner who wants to operate it, who wants to put this equipment to its intended purpose and can put people back to work.”

Bill Drallmeier, a former driver who worked at the Duluth plant for 25 years, said he was surprised by the closing despite noticing a difference in operations about six to nine months before the plant closed.

“We saw a change happening in the quality, the style of the board,” the 56-year-old Superior man said today. “They weren’t replacing things. Doors that were breaking, they weren’t replacing, so we had a hint. You always heard it’s a 50-year-old plant. You always hear they’re going to shut the doors. You talk to the guys who have been there 30 years say, ‘I’ve heard that since we got here.’ ”

Dennis McCort, 61, of Duluth, another former driver who worked at the plant for 25 years, said workers began to wonder if the plant was going to close based on the reduction of orders.

“I think that the company was saying that we couldn’t produce the board properly, which we could. And we would cut back on orders and then cut down our days,” said McCort, who hopes with retraining he can work for five more years instead of retiring at age 62 with a smaller pension. “We were off for a week a month for a while then they said, ‘Well, you can’t keep up with what the orders are.’

“Well, yeah, we were down for eight days a month. You kind of knew it was coming, but just kept hoping in the background maybe not.”

The company gave its laid-off workers a severance package, though it was not required in their union contract. For the first 15 years of service, the company is giving workers 20 hours of pay for each year worked. Those with 16 to 26 or more years with the company also get a full week’s pay for each of those added years worked, up to 26 years, Drallmeier said in October.

Under federal law for a plant closure involving more than 100 workers, the company also must compensate employees with two months of pay, whether they work it or not, starting with the Aug. 21 plant closure announcement, Drallmeier said. But the eight weeks of pay is being subtracted from the severance package, he said.

Efforts by the union to better the severance package weren’t successful, Drallmeier said. No severance is required, “so when they come and offer this, you got to take what they give you,” he said.

With the average age of the laid-off workers in their 50s, some longtime employees are eligible to retire. Some have found new jobs.

The grant announced by the city today is effective immediately and will run through Dec. 31, 2013, with the possibility of an extension to the end of 2014. Don Hoag, Duluth Workforce Development Manager, said the grants will focus on two tracks — job search and retraining — for displaced Georgia-Pacific workers.

“It’s a good thing,” Dwight Wickstrom, 56, of Esko, who worked at the plant for 37 years, said at the news conference, “and I believe it’s going to get better.”

Former Georgia-Pacific employees interested in assistance should contact the Duluth Workforce Development Center at (218) 302-8400, or visit the office at 402 W. First St.

News Tribune reporter Candace Renalls contributed to this report. This story originally appeared on duluthnewstribune.com.