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Glatfelter announces layoffs at Spring Grove facility

Written by Chris Balusik and Lillian Reed, USA Today Network | Jul 31, 2017 1:15 PM
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Photo by Jason Plotkin, York Daily Record

(York) -- Citing market challenges tied to supply and demand, Glatfelter has announced the elimination of about 120 positions, 30 of which will be from its Spring Grove facility.

The company plans to cut a total of 70 salaried positions across Glatfelter's Specialty Papers unit, including the 30 in Spring Grove. A paper mill in Chillicothe, Ohio, is also closing, taking with it 50 hourly positions, though the company is hoping some of those positions can be relocated to other facilities.

The layoffs are expected to be effective by the end of September, company representative Eileen Beck said Friday.

"The supply-demand imbalance in the printing and writing markets continues to put pressure on industry operating rates and selling prices," said Dante Parrini, chairman and chief executive officer for Glatfelter. "In light of the challenging market conditions, we must aggressively manage costs by eliminating capacity without impacting our ability to service our customers.

"While these are difficult decisions, we must take the actions necessary to strengthen our Specialty Papers business and position Glatfelter for long-term success."

The 50 manufacturing layoffs are being brought about by the planned shutdown of Paper Machine 24 at the Chillicothe mill, which should cease production by Sept. 30. The machine's shutdown will remove about 80,000 tons, or 10 percent, of the Specialty Papers unit's paper production from the paper market to help bring overall supply more in line with demand.

Likewise, the reduced production will result in an additional savings to the company in that it will not have to go outside its own pulp supply for production. When running at full capacity, the company must purchase some of its wood pulp elsewhere, which can be expensive, according to Beck.

Beck told the Chillicothe Gazette that the layoffs were presented to employees Thursday through an organizational announcement, followed by individual conversations. There are several people that will be informed next week, she said, because they are out of the office this week.

Glatfelter estimates the machine shutdown and personnel reductions will result in an annual improvement in net profitability of about $9 million, as well as the opportunity to avoid "costly market-driven downtime" on the machine.

The move fits with the company's effort in recent years to control costs and improve efficiency, said Tim Hess, Glatfelter senior vice president and president of the Specialty Papers unit.

"Our continuous improvement initiatives in recent years have improved paper machine productivity and efficiencies across Specialty Papers' asset base," Hess said. "These improvements, combined with the market weakness, have eliminated the need for the capacity from the PM24 machine.

"We appreciate everything our employees have done to help us compete successfully in our markets, and we are committed to assisting affected employees and their families during this time of transition."

Beck said that because of that continuous improvement process, it is unlikely the positions involved with the machine shut down would at some point in the future be called back.

York Daily Record reporter Gary Haber contributed to this report.

This article is part of a content-sharing partnership between The Evening Sun and WITF. 

Published in News, York

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