Appvion Announces Permanent Layoffs at Spring Mill

The local workforce took another blow when Appvion announced last week that it will permanently reduce the number of employees over the next several months.

According to company officials, an agreement between Appvion and United Steelworkers Local 10-422 to a restructure of the company's Spring Mill Plant was reached in order to maintain current production volumes while operating an a more efficient cost-effective way.

Employees were notified of the coming change by letter.

According to the restructuring agreement, the workforce reduction at the Spring Mill plant will take place over the next several months with a severance package offered to 50 employees based on seniority.

Appvion officials cited the decline in carbonless and securities markets, making the reduction necessary in order to remain competitive in a world going paperless.

This is the third major change Appvion has gone through since the company become employee owned.

In 2001, Appvion became an employee-owned company when more than 90 percent of employees participated in the company's Employee Stock Ownership Plan (ESOP). Employees contributed more than $100 million in retirement savings as a down payment on the $810 million purchase from previous owner Arjo Wiggins Appleton, making the company 100 percent employee owned.

In October 2017, Appvion filed for Chapter 11 bankruptcy protection, hoping a reorganization plan would put the company in a better financial state.

The plan changed from reorganization to a complete sale of the company by making a "stalking horse" asset purchase agreement bid, with a minimum selling price of $325 million.

Kevin Gilligan, Appvion's chief executive officer at the time, said that selling the company was the best option.

However, when the stalking horse sale as accepted, millions of dollars employees had invested in the ESOPs were lost.

In a letter to employees, Gilligan stated that the company was not negotiating from a position of strength and that the ESOP structure would not continue, saying "the stock purchased in the ESOP will not have any value."

Employees and retirees said they stood to lose between $150,000 and $500,000.

In May 2018, Appvion was sold to a group of its lenders, led by Franklin Advisors, Inc., for $340 million plus the assumption of substantial liabilities.

The impending loss of jobs at the Spring Mill plant comes on the heels of the closing of two other major area employers.

In May 2019, North American Communications in Duncansville abruptly shut its doors, leaving 300 people jobless.

Two months later, in July, WATCO, a railroad tank car cleaning and repair facility in Hollidaysburg, announced its closing, leaving 70 people unemployed.