Harold Cody is Senior Editor, Pulp & Paper

"Rationalization" hits home

Global competition is a fact of life for pulp and paper mills worldwide. Competition is nothing new, but in the last couple of years, the impact has been even more acute than normal. And I recently observed the impact of this on local mills.

What brought this to the forefront of my attention was my annual New Year's ritual. As do many people, I make up a list of New Year's resolutions (lose weight, exercise more, etc). I also reflect on events of the preceding year as I look forward to the New Year. Normally, I focus on personal issues, such as health, happiness, my children, my family, etc.

However, this year was different. This year I also reflected on large scale changes that the U.S. pulp and paper industry and the world industry, for that matter, are undergoing. I did this in part because these changes hit home in the latter half of 2000. In the area I reside in-near Kalamazoo, Mich.-several paper mills and one large office and school products plant closed for good. Georgia-Pacific's Kalamazoo communication papers mill closed in December. The Crown Vantage mill in Parchment closed in November, and Mead's plant shut in August.

I have seen a lot of this in my career. But when you read about a mill closing in the next state, half a continent away, or in another country, you think about it and wonder, but that's all. It's often described as "capacity rationalization"-i.e., shut down high cost mills and reduce excess capacity. In my case, it was a little more personal.

THE PAPER CITY. I did not personally know many people that worked at these mills. Nevertheless, given the history of the paper industry in the Kalamazoo area, these changes were prominent to me. Kalamazoo was called the Paper City in the late 1800s, and by 1945, 40% of all manufacturing workers in town were involved in paper. The first mill in Kalama-zoo-the aptly named Kalamazoo Paper Co.-was built in 1867, and by 1937 the mills in the area had capacity for 5 million lb/day.

Some names from the area, such as the town of Parchment, were synonymous with paper, with the town named for its most famous product. The mill was built to make a paper wrapping impervious to moisture used to keep food fresh.

An uncomfortable incident is the reason for this column and my extended reflections upon these changes. I was at the post office to pick up a parcel. On it was my name, address, and employer (Pulp & Paper). The clerk-whom I did not know-glanced at my mail and handed it to me. As I was walking away, she suddenly queried me about the closing of the G-P mill. She also asked why the other mills had closed.

As a long-time resident of the area, she knew several people who had worked most of their lives at the mills. Some families had ties that stretched back generations. The changes would be difficult, she noted, particularly since the G-P mill closed just days before Christmas. "Nice Christmas present," she commented, and then repeated, "Why did it happen?"

I managed to mumble something about global competitiveness, higher energy and fiber costs for non-integrated mills, and low-cost imports. I even made a regrettable remark about how I was surprised that the mills had lasted this long, given that the owners and previous owners had invested little or nothing in most of these facilities in years. "Old mills, old equipment, and small-scale operations don't survive" is what I was attempting to explain. The writing was probably on the wall for 10 years, I observed. Of course, then I really felt like a heel. While true, the comments were cold.