Fallout of Smurfit-Stone Closure
Smurfit-Stone Closure News and Views
The mill's demise will bring dozens of consequences, none of them good, experts say.By Amy Linn, 12-15-09
As news sinks in about the Dec. 31 closure of the Smurfit-Stone Container Corp. mill in Frenchtown, observers and experts are weighing in on possible outcomes for the region and the state. Among the various forecasts:
Patrick Barkey, director of the University of Montana Bureau of Business and Economic Research (BBER), predicts the shut-down will result in as many as 1,500 lost jobs, factoring in the lay-offs that could occur in businesses that depend on the plant or serve its employees. These include trucking, construction, the retail trade and health care services.
The closure will also “put additional stress on local and state governments dealing with declines in tax revenues,” Barkey stated in a press announcement. The 417 full-time jobs at the plant—all of which will be lost—involved “about $45 million in payroll and benefits,” the announcement said.
The average wage at the mill was about $70,000 a year—far more than $26,000 a year earned by most others in Missoula, Barkey added. “The jobs at Smurfit-Stone have a very large footprint across the local economy,” he stated.
The closure could also slow Missoula’s recovery from the recession and lead to zero or negative growth in Missoula’s economy next year, he predicted.
Ellen Simpson, executive vice president of Montana Wood Products Association, told KPAX reporter Allyson Weller that the mill played a huge role in the wood products industry, which accounts for one third of the state’s 24,000 manufacturing jobs. Among many things, she said the mill handled small-diameter timber and “leftover materials,” filling an important niche.
Simpson told KPAX that her organization and the Logging Association will meet in January to discuss ways to protect jobs and provide some stability in the industry.
Missoulian reporter Michael Moore, meanwhile, pointed out that Smurfit was a major contributor to nonprofits like United Way, the recipient of more than $1.4 million in donations from the corporation and mill employees since 1997.
“Right now, we’re discussing what we can do to help these people who have done so much to help us over the years,” Susan Hay Patrick, the United Way’s chief executive officer, told Moore.
Smurfit was also a donor for a wide variety of other nonprofits, from the Watson Children’s Shelter and the Missoula Children’s Theatre to the Missoula Symphony Association, Youth Homes, Raptors of the Rockies, and the YMCA. According to a 2007 corporate report, Smurfit-Stone and its employees “are the largest contributors in the county.”
Since 1956, under several different owners and names, the plant has been a key fixture: controversial, troubled, thriving, struggling, a Missoulian timeline shows.
The pulp mill was first owned by Waldorf Paper Products Co., then merged to become Hoerner Waldorf Corp. (1960), then was purchased by Champion International Co. (1977), then was bought by Stone Container Corp. (1985), and became Smurfit-Stone Container Corp. after a merger with Jefferson Smurfit Corp. in 1998.
In 2010, it will become history.
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If Montana is to have a sort of viable, landscape-scale forestry sector it so badly needs (6 million acres dead in the last decade don't lie), then the next step is the creation of some kind of consortium to buy and re-start the facility.
Otherwise, the game is over and we might as well light the match.
Another way to fund thinning projects will be needed. Probably the only ones which will remain justifiable will be those to protect communities and developments from fire. We can't afford to and should not provide continued free fire fighting to any more homes built in harm's way. Only fire will fully address the die off of trees due to the changing climate and excess fire suppression of the past.
This closure will take a while to work it's way through the economy, but was an inevitable eventuality. Missoula probably won't be drastically impacted, but rural western montana will further change.
I sympathize with those directly and indirectly affected, particularly in the current grim job market. Our transition to a more sustainable economy will be difficult. Change is a necessary constant for which we must plan or from which we must suffer.