Wisconsin Rapids, Wis. (WAOW) -- Verso Corporation announced Monday that it will be closing it's Wisconsin Rapids paper mill indefinitely.
According to Verso's press release the closure is resulting from the COVID-19 pandemic that decline in demand for graphic paper and reduced use of print advertising in various industries.
"It is critical that we maintain a healthy balance sheet and focus on cash flow, while balancing our supply of products and our customers' demand," said President and Chief Executive Officer Adam St. John, in a news release. "After a comprehensive review of post-pandemic demand forecasts and capacity, we made the difficult decision to idle the Duluth and Wisconsin Rapids mills. We expect the idling of these facilities to improve our free cash flow. The sell through of inventory is expected to offset the cash costs of idling the mills."
Verso expects to idle the Wisconsin Rapids Mill by the end of July 2020, and the Duluth mill by June, 2020. The two closures will result in the layoff of approximately 1,000 employees.
The Wisconsin Rapids Mill employs around 900, and according to Verso, "a majority of the employees will be laid off." An unknown number of employees will be kept on after July 31 for an unknown amount of time to continue limited operations and maintenance of the mill.
According to the press release, Verso is going to explore "viable and sustainable alternatives" for the paper mill, including restarting if market conditions improve, selling, or closing permanently.
"Decisions to idle facilities are always difficult because they impact employees, their families, and communities," said St. John in the release. "Verso is committed to treating all of our affected employees with fairness and respect. As always, safety is our highest priority and will be our primary focus during this difficult time."
Four Wisconsin Rapids leaders have made statements on Verso closing the paper mill: State Representative Scott Krug, Senator Patrick Testin, Wisconsin Rapids Mayor Shane Blaser and Rep. Ron Kind. The Wisconsin Paper Council has also made a statement.
State Representative Scott Krug's statement:
“COVID-19 has impacted our lives more than we could have ever imagined. Today, we see another horrendous side effect from this outbreak. Businesses big and small have been decimated from decreased demand and forced shutdowns and today, Verso in Wisconsin Rapids took the latest hit. A full shutdown has never happened in the history of this mill, dating back to 1904. Today, the impossible became reality. Growing up in Wisconsin Rapids my heart hurts today like it never has before, it is now my mission to provide as much opportunity as possible for these families to remain and thrive in Wisconsin Rapids.”
State Senator Patrick Testin's statement:
“This morning, hundreds of families received devastating news that will have an impact on the entire Wisconsin Rapids community. Throughout its history, the City of Wisconsin Rapids and its people have proven to be resilient. This is a city that overcomes challenges – and I’m going to do all that I can at the state and local levels to ensure that the community and the families that are directly affected recover from this as quickly as possible. I have already reached out to Secretary Caleb Frostman at the Wisconsin Department of Workforce Development to talk about what can be done. Together, we will continue to work to push Wisconsin Rapids forward on the path to recovery."
Wisconsin Rapids Mayor Shane Blaser statement:
“I am disappointed by the news that Verso Corporation plans to suspend operations at their Wisconsin Rapids mill and lay off their hard-working, dedicated employees. And during a time when so many have so little, with COVID-19 impacting our health and wealth, this news is even more devastating. My heart goes out to each and every one of these employees and their families.
Paper, pulp, and forestry work is a vital part of our community's history, spawning the charming, resilient community we know today; and this news is certain to have a profound impact on our community. I commit to furthering Senator Testin’s and Representative Krug's efforts to support the affected employees and our community in this difficult transition.”
Rep. Ron Kind statment:
“I’m disappointed to learn of Verso Corporation’s decision to cease operations at its mill in Wisconsin indefinitely. My heart goes out to the workers, their families, and their communities who are all dealing with this new uncertainty in an even more uncertain world. Amidst a pandemic and now economic recession, this will be an increasingly tough time for Wisconsinites, but my office and I are standing by, ready to assist all those who are impacted and ensure they get the help they need. During challenging times, Wisconsinites have always come together to support one another, and I know this will be no different.”
Wisconsin Paper Council statement:
"Verso Corporation’s decision to idle its paper mills in Wisconsin and Minnesota is disappointing news for our entire industry. Upon learning of this announcement this morning, the Wisconsin Paper Council has begun reaching out to state and local officials to assist in coordinating response efforts. Our trade association is committed to doing all we can to provide support to the thousands of employees and community members who have been adversely impacted by this difficult situation."
This is a developing story that will be updated.