Spring Mill Employee: 'It was like being sucker-punched'

Editor’s Note: The Herald does not normally allow sources for news articles to remain anonymous. However, in this case, the Herald believes that there is an important story to be told. At the same time, there is a risk that the person speaking up could suffer repercussions. Herald management is aware of the identity of this mill employee. Also, the print edition of this story contained an incorrect name for a group of lenders who purchased the mill in 2018. The correct name of that group of lenders is Franklin Advisers, Inc. The mistake was the Herald's, and the Herald apologizes for the error.

Employees at Appvion’s Spring Mill plant are in their final weeks of work at the plant that has been a steady source of employment for area residents for 155 years. As the plant winds down toward closure, the current roster of union employees at the Roaring Spring landmark are leaving with a bitter taste.

A 10-year employee who asked not to be identified to protect his severance and unemployment eligibility, said there was no indication the mill was in danger of shutting down and that employees were stunned when supervisors notified them on Feb. 15 that they were losing their jobs.

“It came out of the blue,” he said. “In my department, our supervisor gathered separate groups together and told us what was going on. It was total disbelief that it was actually happening.”

The employee said the news left everyone speechless.

“Everyone was just stunned,” he said. “It came out of nowhere, like being sucker punched.”

Declining morale

Appvion became employee-owned in 2001 when employees invested more than $100 million in retirement savings to purchase the company from Arjo Wiggins Appleton. In return, employees entered an Employee Stock Ownership Plan (ESOP) which lost all value when the company was sold for $325 million in a “stalking horse” sale in 2018 to a group of its lenders led by Franklin Advisers, Inc. Franklin Advisors assumed Appvion’s debts, but employees who had invested their retirement savings in the ESOP lost millions.

“I lost well over $100,000 and there were people who lost more than that,” the employee said. “They [employees] put a lot of money into employee stock, figuring they could retire in their mid-fifties and now they can’t.”

The employee said he thinks that the company has been mismanaged since it became employee-owned, with the employees losing out while executives profited.

“The people in corporate, some of them made out pretty well while we lost it all,” he said.

However, the employee said, morale at the mill had been getting lower long before the losses of the ESOP. He said working at the mill used to be more of a family atmosphere until corporate brought in outsiders to run it, replacing local management with outsiders who did not treat the employees with the same level of respect their predecessors did.

“Back when management was more local, we were treated better,” he said. “It was a good place to work. When people from outside the area came in and started running the mill is when the disconnect between management and employees started. They didn’t care as much about the employees because they weren’t local. It became more impersonal.”

The demise of the ESOP further eroded employee morale that had been sinking for years, according to the employee. He said corporate decisions since the employee purchase made him feel like management was expecting loyalty from the employees but not showing any themselves.

“The employees have done everything they could for the mill,” he said. “They cut jobs here the last couple of years and now one person is expected to do what two people did. They are expecting you to do more and do it safely. People were working overtime and doing what we had to do to keep the doors open and now we get treated like this. People feel so disrespected.”

A final insult

Last week, the employees were told what their severance package will be, and according to the employee, it is a “slap in the face.”

Spring Mill employees, regardless of service time, will be given just three weeks of severance pay and no extended health care benefits.

“The mood here is really bad now,” he said. “Of all the things they have done to us, this was the final insult.”

The employee said every employee will be losing his or her health insurance on April 15, which is the date by which management has targeted to have everything shut down.

“I was hoping we would have some extended insurance that would give me a little lead time to explore my options,” he said. “But with the insurance ending for me and my family on April 15, we are going to have to buy some in the short term until I get another job.”

Starting over

It’s no secret that Spring Mill employees are some of the highest paid workers in the region. While local leaders have pledged to help the soon-to-be displaced workers find employment, the cut in pay most will face is going to significantly affect their way of life.

“We are accustomed to living on what we make and now we may have to start out with a $10-an-hour pay cut,” the employee said. “Not only that, but we are losing all the vacation we acquired. I am losing five weeks. You start out new wherever you go and maybe have to work a year just to get one week.”

The employee said the financial hit employees are facing could be dramatic and force a drastic change in their lives.

“It is going to affect my family financially,” he said. “We are going to have to adjust. It will take a while to get back up.”

The employee said there is also concern from some of the older workers about whether they can even find another job. He said there are people who have worked at the mill for more than 30 – and even 40 years – and they are worried about what they will do.

“I talked to one guy who is in his 60s and he said, ‘who is going to want to hire me?’ He is in that limbo where he can’t retire yet but is going to have a difficult time finding another job.”

Abandoning ship

Appvion officials have yet to publicly address the mill’s closing but the employee said there are signs that people in management might have known it was coming. He said the agreement with Franklin Advisors, who bought the company out of bankruptcy in 2018, expires in June and they were preparing to pull out.

“We were told about a month ago that they had to look for new investors because Franklin had made their money back and wanted out,” the employee said. “We were told in an email from the CEO that they were going to try to market us to another investor to take over from Franklin when their agreement expired in June.”

The employee said the manager of Spring Mill resigned three weeks prior to the shutdown announcement and the production manager left before that.

“People in management were leaving for other jobs,” he said. “I wouldn’t be surprised if they did know and just couldn’t say anything.”

The countdown

The employee said the employees were told that all union employees will be out of the mill by April 15, but when production will stop is still not certain.

“It could be two more weeks, it could be next week,” he said. “It depends on how long they keep you to clean up and do whatever needs to be done to have the shutdown. We were told if people start to leave or not show up, they will close the doors that day.”

Whenever that day comes, and the employee clocks out for the final time, it will bring an end to a job he worked hard to get, and even harder to keep. He admits that after the loss of his stock investment, his enthusiasm for the job diminished, but because of the above-average pay, he stayed with the company that he said he has always wanted to work for.

“I always wanted to work at the mill,” he said. “It took me awhile to get in and I did enjoy it up until the stock loss. After that, I was just there to support my family.”

Although the closing has taken everybody by surprise, the employee said he knew it would happen one day, just not this soon.

“I always hoped I would retire from there,” he said. “I knew that one day the mill wouldn’t be there because paper is a dwindling business, but I always held out hope that it would last another 10 years or so.”