Sappi layoffs affect Cloquet mill

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A handful of employees at Sappi's Cloquet mill were among approximately 70 people laid off Monday at the paper company's major sites, spokeswoman Amy Olson confirmed Wednesday. She declined to give the specific number of people let go in Cloquet but said a total of nearly 700 people are employed there.

A news release states that the cuts stem from significantly lower global demand for coated fine paper products, an industry-wide trend that has resulted from the continued weakening of the U.S. and global economy. Earlier this month, Sappi Fine Paper North America posted its earnings for the first quarter of fiscal year 2009 with a loss of $7 million.

Mike Schultz, managing director at Sappi in Cloquet, speculated the layoffs were not greater at their facility because of previous work to streamline operations.

"We are already fairly lean," he said.

Although the number of cuts was small, Schultz expressed regret for the people who lost their jobs.

"I'm personally saddened that we had to let anybody go," he said.

Sappi will provide separation benefits and job placement services for those whose positions were eliminated.

The news of layoffs came as Sappi announced plans to suspend operations at its Muskegon mill in Michigan, effective April 1. That mill will close for six months, affecting 190 employees. During that time, other mills within Sappi will make the range of products offered by the company. The mill in Michigan could resume production at the end of six months if market conditions improve, according to the news release.

“Reducing our salaried workforce and suspending our operations at Muskegon Mill was an extremely difficult decision but it was the only option that would enable Sappi to reduce costs and remain competitive in the industry, while continuing to meet the needs of our customers,” said Mark Gardner, Sappi Fine Paper North America president and CEO.

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