The Luke paper mill, an economic engine in Western Maryland for 131 years, will close by June 30, owner Verso Co. announced Tuesday.
The shutdown means 675 people spread across Maryland, Pennsylvania and West Virginia will lose their jobs, the company said.
The company said it had explored producing more types of paper products at the Allegany County facility on the Potomac River, but determined even that would not help ensure its profitability as global demand for paper declines.
“It is unfortunate that we had to make the decision to close the Luke Mill, but the continuing decline in demand for the grades of paper manufactured there left us no choice but to close this facility that has struggled with profitability for a number of years,” Verso’s interim CEO, Leslie T. Lederer, said in a statement.
The mill was the subject of a 2017 Baltimore Sun series because it has received millions of dollars of subsidies from Maryland electricity ratepayers for generating energy by burning a substance known as black liquor. The paper-making byproduct is considered a renewable fuel under a Maryland program established in 2004 to promote use of green energy, making the facility controversial among environmentalists.
Millworkers always worry about possible layoffs or a closure. But officials with United Steelworkers Local 676, which represents the bulk of millworkers, were nonetheless surprised by a phone call informing them of the closure at 7:15 Tuesday morning. Verso officials told them the decision was made last week, said Jim Strong, assistant to the director of United Steelworkers District 8.
Ed Clemons Jr., mayor of the town of Luke, said the closure was blindsiding. He heard about it on the radio Tuesday morning, and ever since has been on the phone with Allegany County, state and federal officials “to try to come up with a game plan to move forward,” he said.
“Believe me, it was a shock,” he said. “This is a shock to us all.”
Strong said the union’s collective bargaining agreement entitles the millworkers to severance and pay for earned vacation, and that the local would soon seek to bargain with Verso for some extension of health and life insurance coverage. The steelworkers’ union represents about 600 of the mill’s workers, with other employees members of the International Brotherhood of Electrical Workers and North America's Building Trades Unions.
The Luke mill was founded in 1888, by a pair of brothers from Scotland who came looking for timber, and a way to make paper that didn’t contain linen. Their company eventually became known as Westvaco Corp., a name that is still visible on the massive plant despite a series of corporate sales and mergers that left it in the hands of Verso in 2015.
The mill once made Luke, and neighboring Westernport and Piedmont, W.Va., booming company towns, employing more than 2,000 people at its peak in the 1950s. Generation after generation of families sent their sons to work there.
It has long specialized in varieties of coated paper — the type used to make shiny labels on jars and cans of soup and for magazines such as National Geographic.
But its workforce has declined over the years, as the mill has adapted to declining demand. It joins dozens of paper mills that have closed across the country in recent years.
“The decision to close this mill that has been in operation for more than 130 years was an extremely difficult one, and is in no way a reflection on the dedicated men and women who work there,” Lederer said. “We know that this will be an extraordinarily emotional and challenging time for our Luke Mill team, and Verso is committed to treating them with fairness, respect and dignity during this difficult time.”
The mill is one of the largest employers in Allegany County, behind the likes of Western Maryland Health System, CSX Transportation and Frostburg State University. Allegany and Garrett counties’ unemployment rates were both about 6 percent as of February, about 2 percentage points higher than the statewide average, according to the state labor department.
Tuesday afternoon, politicians already were discussing what could be done to soften the closure’s blow, if not to prevent it from happening.
Maryland Gov. Larry Hogan said he has directed state labor and commerce officials to “do everything possible” to help the workers and the region, and to recruit new businesses to the area. He invited local elected officials to a meeting Wednesday to discuss next steps, a spokesman said.
“My heart goes out to each and every one of these employees and their families,” Hogan said in a statement. “They are decent, hard-working people who deserve better.”
U.S. Rep. David Trone, a Democrat whose district includes Western Maryland, said he is working with state, local and federal officials to support employees, as well as “holding the company’s feet to the fire” to ensure it treats the workers fairly.
The closure will have a significant impact on the town of Luke, population 61 as of 2017, because the mill provides its drinking water and treats its sewage, Trone said.
“My heart breaks for the hardworking employees and their families of the Luke Paper Mill,” Trone said in a statement.
State Sen. George C. Edwards, who represents Western Maryland in Annapolis, said he feared the closure would have “a tremendously negative impact.” Edwards said he hoped to meet with Hogan’s team in Annapolis Wednesday when the Senate comes back for a special session to discuss a strategy to try to keep the plant open.
Allegany County Administrator Brandon Butler said he already has been in contact with the Hogan administration and federal representatives about worker retraining opportunities and other state and federal programs that help communities deal with large plant closures.
“We need to have some programs in place,” Edwards said. “We need to see what can be done to get them to change their thought process and keep the place open. It’s going to have a real big impact. Garrett and Allegany are going to be hit hard.”
Maryland’s U.S. senators criticized the closure, and joined in calls to assist millworkers. Sen. Chris Van Hollen called the decision especially “frustrating” given the mill’s long history in the community. Sen. Ben Cardin questioned why Verso had not notified state or local officials in advance of the closure.
“Having for years worked cooperatively with the mill’s owners on trade and regulatory compliance issues, I am truly surprised that Verso did not notify any elected officials in advance of the planned closure,” Cardin said. “Without a doubt, we would have explored every possibility to keep the plant open.”
Verso spokeswoman Kathi Rowzie said the company could not give advance notice because it’s a public company, and thus is prohibited from disclosing material information to anyone until it is disclosed publicly to investors. She said the company contacted officials in Maryland and West Virginia “within minutes” of announcing the closure in a news release.
Given that many of the plant’s workers live in neighboring West Virginia, local leaders as well as the Hogan administration also have been in contact with that state’s senior U.S. senator, Joe Manchin.
The mill is one of the largest industrial sources of air pollution in Maryland, according to EPA data. Despite that, its owners and its workers for years have fought off efforts to remove black liquor from a list of renewable fuels eligible for subsidies from Maryland electricity ratepayers.
As recently as this year, concerns about potential loss of union jobs prevented lawmakers from taking those subsidies away. When the General Assembly approved a bill last month expanding the state’s supply of renewable energy to 50 percent of its electricity supply, it was only after last-minute negotiations scuttling a proposal to end the green energy subsidies for trash incinerators. The financial support for paper mills remained safe throughout the discussions.
Mike Ewall, executive director of the Energy Justice Network, called the closure “unfortunate” for millworkers and their families. But, he added, “it’ll be good for people who breathe.”
Western Maryland residents were holding out hope that the mill isn’t shutting down for good. It has gone through a series of corporate owners — sold twice just since 2005 — so local historian Patrick McCarty wondered whether there won’t be one more.
“Our great hope is that somebody else will come along,” said McCarty, a Westernport native and resident who has seen the highs, and now the lows, of the Luke mill. “It's a pretty sad day around here.”
Baltimore Sun reporter Luke Broadwater contributed to this article.