Chillicothe — The Ross County Commissioners have hosted three ‘paper mil response team’ meetings since Pixelle’s announcement of the closing on April 15th…and then the delay of that on April 18th.
Unlike the commissioners’ regular sessions, the meetings are not podcasted or recorded on the commissioners’ YouTube account since they are “work sessions.” But they are open to the public as well as news media – until they get into “executive session” discussions like contracts and negotiations, which will mark the next stage of their work.
The work group mentioned two rumored potential buyers, as well as a possible supply link to a neighbor…and a third possible buyer has been mentioned to me. Read about all four in a side story.
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So far the group has been meeting for about an hour starting at 1pm on Mondays in the commissioners’ chambers on the second floor of the Ross County Courthouse.
In their first response team meeting on April 21st – the Monday after the week of whiplash announcements on the mill – the group got themselves established. Representatives of local economic development (with an advisor), local businesses, and U.S. government gathered.
An outline of that meeting:
- This is a dynamic situation.
- Eight months of the pause on closing will disappear quickly.
- Officeholders from Friday’s rally (state and U.S.) are also involved in these discussions.
- These stakeholder meetings will be held 1pm every Monday, with any necessary zoom calls.
- Pixelle has 830 employees, but there will be impacts through the mill’s supply chain – this can become a ripple-effect crisis. There are about 100 stakeholders including mill supply companies.
- Tremendous interest from public on paper mill.
- Commissioner Jack Everson: Do not look at this through fear.
- This response team has great interdisciplinary skills to manage the crisis.
- OhioSE, the regional economic development nonprofit, is very involved.
- Will be having zoom call tomorrow with mayor, plant manager, JobsOhio, etc.
- Not much communication with Pixelle plant manager recently.
- Need to get the mill listed on ZoomProspector to start to get it marketed.
- Commissioner Oody Lowe: It’s tough to know what’s inside the mill. Economic Development head Tammy Eallonardo: That’s why we need to start building a file on it.
- For marketing, factory machines are less important than the utilities available in the facility: gas, electricity.
- Everson: Less worried about air pollution than soil…but not expect ground contamination. It seems Pixelle talks to the EPA weekly.
- Ryan Scribner of The Montrose Group, advisor to local economic development: The economic impact tool model is based on geography.
- Ohio Job and Family Services is working with Pixelle to get a ZIP Code list of employees, to see what locations will be affected by layoffs.
- Hotel owner Bert McAllister with Melody Young of local tourism: He has his own take on the economic impact – chemistry consultants to the mill may stay in his hotels for years.
- Commissioner David Glass: We need to get a better sense, idea of what we have to lose.
- Scribner: Municipal income tax may have to refund or credit taxpayers if there are layoffs.
- Job assistance was planned for once-a-week meetings – now after announced delay, once a month.
- Pixelle may get a temporary workforce to keep mill running. If the workforce is bailing out, we need to map that out – we want to keep as much local labor as possible.
- We need to market the workers’ loyalty.
- Mill employees’ skill sets are also good for Kenworth, etc. – everybody is looking to hire those skills.
- The worst case scenario was Tuesday – but the gauntlet was thrown down at Friday’s rally, with H.I.G. Capital backing down, and attendance of 200.
- Eallonardo: I’ve never seen so many politicians in one room, then out quickly and not politicking, than at the Friday event. All agreed that was an impressive event.
- Everson: This is a Ross County and Chillicothe “legacy business” – we must manage this situation. And yet, we have no control over a “legacy site.”
- Everson: Looking forward to talk to the plant manager, after being “the hatchet man” for four other plants in his career. Eallonardo: And you had be the hatchet man for the city as the mayor during cutbacks several years ago.
High points of the second response team meeting on April 28th:
They now have the spreadsheet with employee ZIP Codes, to identify the geography affected by possible layoffs.
Pixelle is having employee issues: 10 people have left, and they are near to struggling to maintain the mill.
Everson: Pixelle is being pressured to produce to the end of the year; suspects H.I.G. might use failure of employees as excuse to close mill.
Glass: The delay is not happening as they understood; Pixelle is not allowing orders to be taken like expected; breakdown of coordination or inconsistent actions
Eallonardo: The local plant manager learned that the mill was remaining open only through news reports – not from the company; heard that Pixelle is not paying local contractors.
Everson: We need to be sure we are not violating confidentiality. Eallonardo: This is common knowledge.
No way to expect employees to stay on when the plant’s closing status is still at April 15th, not 18th.
OUC is offering to to help train employees.
The Chamber will support the workforce. If there is no hope for the mill, then Chamber will support a small business development center – like help mill workers to have a “side hustle.”
Note what is NOT said in Pixelle’s news release on the delayed closing: there is no mention there will NOT be layoffs.
Is anyone in direct contact with H.I.G.? Eallonardo: probably only U.S. Senator Bernie Moreno.
Throne: The longer the mill hangs in the balance, the more employees will leave.
Glass: Is our interest in the employees, or in the mill? Two different things. Is it for sale? Is there a potential investor? Will there be an incumbent workforce, or an empty mill?
Everson: In his previous career, he has bought and sold companies…but with the workforce intact.
60% of Pixelle’s product is carbonless paper, which is at the end of its lifespan. The mill could need retooling.
What about pension packages? 3M went through a “silver tsunami” – they lost 500 years worth of experience from mass retirements.
Glass: There are many things we can do in tandem, but we must be careful – we don’t want to frustrate employees to the point of saying “I’m done.” We want to chase viable solutions.
A huge brownfield in the south side of Chillicothe would be a worse option. The best is a buyer to reuse the mill. And, we don’t want to keep the mill on life-support – instead, revive it.
Everson: What type of incentive package can be offered? Eallonardo: JobsOhio is working on that. Glass: We may not want to obligate ourselves with incentives if things fall apart. Everson: We need rules and responsibilities for that.
Chillicothe Council president Kevin Shoemaker: I also have experience in working with redeveloping the Piketon atomic plant.
This is like assembling a jigsaw puzzle without a picture – but as we assemble the perimeter, can build the picture of what we want it to look like.
A new use may net only only 300 jobs.
What are we trying to get to? “If you want the baby to look like you, you’d better be there at conception.”
Eallonardo: We may not want to invest in the mill if it closes at the end of the year. Ross County Commissioner Oody Lowe: “We don’t want to give up the farm just to keep a field.”
Glass: We need to create the picture to define the puzzle.
Everson: We need a contingency plan – worst, best, middle-case scenarios.
Oody: Our path may change three or four times.
Glass: We need to walk in step with state and national officials to avoid redundancies.
Ross County Planner Devon Shoemaker: Is an employee purchase possible? An ESOP [Employee Stock Ownership Plan]? Throne: is that what NewPage did, after MeadWestvaco? – but so long ago.
Alex Sharfetter of the office of U.S. Senator Bernie Moreno: We hope to get a clarification in the next one or two days – hope very clear – getting answers very shortly.
Hope Pixelle honors their verbal promise
Scribner: how is the city engaged? Kevin Shoemaker: we are here, but limited engagement. We will be as involved as we can without getting in the way.
We may need executive sessions to protect confidential information for negotiations. Glass: We are moving to that stage, the discussion is maturing.
Throne: We must prepare the public to learn about our efforts. We will give all we can without jeopardizing confidentiality. We need to put out regular news releases.
Glass: We must keep announcing progress to show we continue to work on the issue.
Throne: Skepticism is ok – but we don’t want cynicism. If the message is the same negative answer, people will stop listening.
Everson: We need to prepare for the worst case scenario, but humanely. I have lessons on that from my career of shutting down companies – we need credibility before we can earn trust. I was a “growth manager,” but not for private equity [like H.I.G. that owns Pixelle). If I laid off people, I found work for them.
If a company is considering “greenfield” construction, it can take 10 years – but the paper mill can be made available immediately. It’s like looking for a home – you have specifics you are looking for, but you’re usually looking for a pre-existing house – you either take the time to build, or buy existing.
Everson: Though the cost to build versus cost to convert are both expensive.
The team will reconvene for their fourth time at 1pm Monday, May 12th, with an “Economic Development Update” at 2:00. (Find the commissioners’ agendas on their website.)
Find several stories on the Scioto Post about the developing story of Chillicothe’s paper mill since April 15th.
