Blue Ridge Paper Products based in Haywood County announced a workforce reduction of 100 jobs last week after $30 million in losses over the past three years.

The announcement came on the heels of two plant closings in Buncombe County, one plant closing in McDowell County and one in Mitchell County for a total of 1,400 jobs lost in 13 days in a four-county area.

The Blue Ridge Paper downsizing will save the mill $10 million a year in wages and benefits. That will help the mill recuperate the $10 million a year it has been losing, but it will not be enough to pull Blue Ridge out of debt, say company officials.

The company took out a loan of $125 million last fall to pay-off debts to various banks. The $125 million was loaned by a group of private investors in the form of bonds, which will come due in 2008 along with 9.5 percent interest. The company also is indebted to an investment firm from New York, which was the primary backer and creditor when mill workers took over the company in 1999.

The mill’s former owner, Champion International, was going to shut down the mill. The workers organized and bought out the Canton mill and the associated Dairy Pac plants. To keep the mill going, employees took a 15-percent pay cut and agreed to a seven-year wage freeze.

While some businesses facing financial trouble opt for a companywide 10-percent salary cut rather than laying off workers, that was not an option for Blue Ridge, said Darrell Douglas, vice president of human resources.

“The employees have already sacrificed when they bought the company,” said Douglas. The seven-year wage freeze is up in 2006, however, and the union will likely demand pay raises for workers. That puts additional pressure on the mill to become profitable in the near future.

At this point, the success of Blue Ridge Paper is contingent on an overall economic recovery, according to John Wadsworth, CFO of Blue Ridge. Paper demand, especially Blue Ridge’s envelope line, is linked to the business climate, from the volume of junk mail to the number of paychecks companies send out.

Foreign competition from cheap paper imports is not a factor for Blue Ridge. The high cost of shipping the relatively low-dollar paper product cuts into any savings a company would garner from cheaper foreign wages or the lack of environmental and labor laws. However, paper mills have been cropping up overseas briskly in recent years to provide foreign markets, rather than American mills making the paper and shipping it overseas. This trend has cut into paper export potential, but Blue Ridge still does a good deal of export business to Europe, Wodsworth said.

The workforce reduction will not impact the volume of paper produced by the mill.

“We’re not going to decrease production,” Douglas said.

The company makes envelope paper and some specialty products, like shiny holographic paper, but its primary line is carton board. The main mill in Canton produces rolls of thick, stiff cardboard. The Waynesville plant coats it with a polyethylene film to make it liquid proof and food safe. The coated cardboard is then sent to one of five satellite plants (Georgia, Virginia, Texas, Iowa or Ohio) where it is creased and folded into a final carton ready to hold food or liquid.

When asked whether jobs at the Waynesville plant were secure as long as the main mill is still around, Douglas said that the Waynesville plant is needed to add value to the Canton mill’s raw carton board, and as long as one is cranking it’s likely the other would, too.

“But I wouldn’t guarantee anything these days. Who knows what tomorrow holds,” Douglas said.

Despite the downsizing, Blue Ridge Paper Products is still the largest manufacturer in WNC with 1,100 workers at its main Canton mill, 200 at a Waynesville facility and 100 positions at corporate headquarters in Canton. Reductions in workforce will be phased in over the next several months by encouraging early retirements. Workers in positions targeted for elimination will be transitioned into vacant posts left by the retired workers.

“Our workforce is older and we have quite a few retirements coming up. We hope not to have to lay-off anybody involuntarily,” said Douglas.