From ‘Magic City’ To Paper Tiger? – Once a Jewel in the Maine Wilderness, Millinocket Is Struggling to Hang On

Stephen Shaw once was a lucky man. Back in the day, he could virtually roll out of bed and be at work at the paper mill next door. The plant was so busy it recruited folks right off the street, and Shaw and his wife, also a millworker, raised three children on healthy wages.

By Pamela Ferdinand
Special to The Washington Post

But those days are gone. And Shaw appears to be out of luck.

The paper mill closed in late December and filed for bankruptcy, and when it reopens in a year, town officials say, its new owners plan to employ only a fraction of the former workforce. Even after spending 33 of his 54 years at Great Northern Paper Inc. here in this rural northern Maine town, Shaw may not have enough seniority to return to the plant.

"I don’t feel very good, but I can’t do much about it," said Shaw, looking at the silent stacks and empty mill buildings from his backyard. "Whether I’m going back to work or not, I don’t know."

That uncertainty is a reflection of a greater unease about the future here.

For more than 100 years, the paper mill in Millinocket — along with another plant in East Millinocket — has been much more than this town’s major employer. It has been its very reason for being, creating and sustaining a community out of the wilderness to support its operations even through the Great Depression. The mill’s closure sent shock waves through this town of about 5,000 people, forcing residents to rethink their destiny in a state known nearly as much for its vast forested lands as for its succulent lobsters.

The pulp and paper industry nationwide has been in trouble in recent years, facing tougher overseas competition and serious price erosion. In the past five years, about 88 mills have closed in the United States, with a loss of more than 40,000 jobs; other mills have made drastic cutbacks, according to industry experts.

Maine, which is the second-leading papermaking state after Wisconsin, is no exception. The state’s relatively high production costs — from generous wages and benefits to high taxes — compounded matters, encouraging paper companies to neglect facilities and invest elsewhere, according to industry experts. Millinocket, located about 60 miles north of Bangor, is one of the most remote mill towns in the nation, making its situation now more perilous than most, they said.

"Maine is being pushed closer and closer to the edge of a cliff, and in some [places] there’s no coming back," said James A. McNutt, executive director of the Center for Paper Business and Industry Studies, a think tank at the Georgia Institute of Technology. "Millinocket is teetering."

Judging by the empty storefronts along Penobscot Avenue and the number of homes for sale, it’s hard to imagine that this was once "The Magic City of Maine’s Wilderness," with a grand, three-story hotel that boasted brass beds and two dinner sittings. At its height, Great Northern employed nearly 5,000 people, many of them hired straight out of high school, but it underwent three ownership changes in the past decade and employed fewer than 1,200 workers by the end of last year. It filed for bankruptcy in January. Toronto-based Brascan Corp. bought the company for $103 million in April, reopening its East Millinocket plant in June with several hundred employees.

Workers from the bankrupt company and creditors, from large corporations to log haulers, are still owed millions of dollars, however, and the effect of lost salaries (mill workers average $50,000 per year) has trickled down to an already struggling region. A bank, a sporting goods store and a department store closed, and retail shops are struggling. Unemployment stands at more than 30 percent, and three-bedroom homes with hardwood floors, albeit aging and on postage stamp-size lots, can be purchased for as little as $30,000, realtors said.

After the mill filed for bankruptcy in January, the railway serving Millinocket cut wages, and town officials suspended capital projects, slashed the budget by roughly $500,000 and eliminated the jobs of a police officer and a tax collector. A local food bank has gone through nearly 400,000 pounds of food in the past six months, enrollment at the job training center is up, and many people are commuting to other parts of Maine or heading out of state, leaving spouses and children behind.

"It’s been devastating, to say the least. It’s torn families up," said Hershel Hafford, pastor of I Care Ministries in Millinocket.

Town Manager Eugene Conlogue agreed: "You have people who are looking for a job for the first time in their lives."

Relief donations for millworkers and their families have poured in from all over the state, he said. One company trucked free oil into town, schools held bake sales to raise money for proms, local organizations such as the Rotary Club hosted fundraisers, and Maine author Stephen King donated thousands of dollars.

"It’s probably pulled the community closer in a lot of ways," said Kathy Kenneson, 49, who owns three businesses — including the Moose on the Roof gift shop — and has lived in the town for 30 years.

If there is another silver lining, some here believe that the mill’s closure and downsizing could result in a successful reinvention of Millinocket as a haven for entrepreneurs with an outdoorsy bent and a second-home destination for out-of-towners who want to snowmobile, raft, hunt and fish at the northernmost end of the Appalachian Trail.

The three-year-old Millinocket Area Growth and Investment Council is speeding efforts to help diversify the economy, advertising vacant mill office space to attract business incubators from southern Maine and marketing Millinocket as the vacation gateway to Mount Katahdin and Baxter State Park.

Bruce McLean, the council’s executive director, said he has accomplished his first goal of bringing high-speed Internet access to Millinocket, but he has met some negative local reaction to the overall plan. Changing the image of Millinocket "has been a lot harder than I expected," said McLean, who grew up in the town. "You’d think they’d be all for it, but a lot of people just want it to be the way it used to be."

Westbrook, a Portland suburb that also was heavily dependent on a mill, has attracted millions of dollars in public and private investment.

Some paper industry experts argue the state as a whole has to encourage investment in long-neglected mills by improving its business climate. Millinocket and neighboring communities are examining ways to consolidate school systems and regionalize municipal services to reduce the tax burden on companies. And while several mills have announced layoffs in recent months, Gov. John E. Baldacci (D) has initiated tax incentives for business development and helped forestall the closure of a Georgia Pacific tissue machine in Old Town, about 60 miles south of here.

The company that purchased Great Northern intends to invest $70 million in a new machine at the Millinocket mill before it reopens, but few here expect papermaking to restore the town to its former glory.

Rep. Michael Michaud (D), a trucker who worked at Great Northern for 30 years — like his father, and his father’s father before him — knows that in Millinocket, people still gather at the Scootic Inn bar, and logging trucks can be seen rumbling through town.

However, the name of the mill has been changed by its new owner to Katahdin Paper, and the character of the place may be transformed, too, if Millinocket is to thrive and perhaps provide a lesson for other one-industry towns.

"It definitely will survive," Michaud said. But, he added, "it will no longer be the way that it was."

© 2003 The Washington Post Company

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