Most of the 700 or so employees will soon be out of a job after negotiations with Atlas Holdings Inc. broke down, officials announced Thursday.
The company’s pulp and tissue mills will be operated by a skeleton crew and closed in the first three months of 2012. Eventually, the waterfront site will be razed and sold for development, said Bob Brand, a Kimberly-Clark spokesman.
“For the folks on the sales team, this is disappointing news,” Brand said. “We’ve been trying to sell the plant for much of a year and this is not the outcome we had hoped for.”
Brand said he couldn’t discuss details of the negotiations with Atlas but added that a problem that could not be resolved involved environmental issues relating to Everett’s East Waterway.
The waterway is part of the governor’s Puget Sound Initiative to clean up pollutants. Scientists are studying the area’s pollution and who should be responsible to clean it up. The waterway has been identified to have dioxin, a cancer-causing toxin produced in chlorine-based pulp making.
The company Thursday informed union officials and was holding meetings to talk to employees.
Josh Estes, president of Local 183 of the Association of Western Pulp and Paper Workers, said Kimberly-Clark had said just last week that the deal was expected to go through, probably this week.
“At that time, Atlas began the process of handing out applications with the anticipation that a sale would be final sometime in January with a startup to follow shortly after,” he said.
The company had announced earlier this year that the mill would be closed if a buyer could not be found. In September, it entered into exclusive talks with Atlas. Atlas and the union had agreed to a contract which would have employed about 350 people and granted Atlas concessions on wages and work issues to help make it successful.
“Today’s news of the plant closure is devastating,” Estes said. “Words cannot describe the disappointment that we feel. Our membership has waited all year long to get word of what their future will hold, and now today, when everyone expected to hear positive news, they have to hear this. It just makes me sick.
“We were hopeful that we would be able to continue the tradition of making the best paper products here in Everett, and are extremely disappointed that Atlas and Kimberly-Clark were not able to come to an agreement,” he added.
“When you consider the strong ties to the community and the rich history that the employees of this mill have established over the years will be lost, it is truly a sad day.”
Dave Faddis, a former Everett mill manager now a vice president of product supply for Kimberly-Clark, said the company is disappointed with the failure of the sales effort.
“Our focus now is on completing the timely and efficient closure of the mill and doing what we can to help our Everett employees with this difficult transition,” he said.
Everett Mayor Ray Stephanson said he, too, was disappointed. “Our hope is that both parties will reconsider and try to resurrect negotiations for a purchase-and-sale agreement before the end of the year,” he said.
Everett port Director John Mohr agreed.
“We are saddened by this development, as a lot of hard work and creativity went into getting the mill ready for a new owner,” Mohr said. “We hope the parties resume negotiations and the environmental hurdles can be resolved.”
United Way of Snohomish County President Dennis Smith noted that the company and its employees “have been an important resource to the community for a number of years.”
“Their contributions ($2,222,409 since 1998) to United Way have helped to make Snohomish County what it is today,” Smith said. “Many of the workers at the mill come from families that have worked there for generations. This is truly a great loss for our community.”
Union president Estes is a member of the United Way board of directors.
Brand said there were no other potential buyers and the company would continue to prepare for a shutdown.
Kimberly-Clark anticipates the last day of operation will be by the end of March, with significant scale-down activities beginning in the next two weeks.
The mill was built on Everett’s waterfront in 1931 as Puget Sound Pulp and Timber Co., which helped build the city’s reputation as a major pulp producer.
In that era, the bay was ringed by factories on the waterfront, helping Everett earn the nickname, “The City of Smokestacks.” The other factories have all closed.
Sound Pulp and Timber became Soundview Pulp Co. in 1935 and was purchased by Scott Paper in 1951. Scott merged with Kimberly-Clark in 1995.
Since the merger, the company has invested about $300 million in the Everett operation, installing major wastewater treatment systems, adding a new effluent outfall used by the cities of Everett and Marysville, and changing its pulp-making system.
In 2000, the company changed from a system based on chlorine to one with chlorine dioxide, which produces significantly less dioxin. But the company still likely will be responsible for paying a share of the cleanup, which will cost millions.