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A Paper Mill Dies and a Michigan Town Struggles

New America Media, News Report, Slideshow, Benjamin Jarosch Posted: Mar 07, 2009

ONTONAGON, Mich. -- Residents of this Northern Michigan company town remain anxious about their future after the main employer, Smurfit- Stone Container Corporation, filed for bankruptcy on Jan. 26. The Smurfit-Stone paper mill produced a corrugated medium for cardboard boxes used by such clients as Kellogg, FedEx, Budweiser, and RCA.

The first warning came in November 2008, when the company laid off 150 men and women, citing a decreased demand for its products.

Operations were supposed to resume by the first of this year, the company told the union. But these workers are still waiting three months later. Living at the end of Route 45 along Lake Superior, the towns residents rely on business operations at the mill to survive. The shutdown has left residents strapped for options.

At the February meeting for Steel Workers Local 2354, the union representing mill workers, members voiced their frustrations about registering for unemployment, communicating with the company, and asked when they will get their jobs back.

We are sitting with uncertainty, said Dennis OBrien, local vice president and one of those laid off. Each month, the workers are told they will go back to work that next month. When that time comes, the deadline is extended another month. It feels like the right hand doesnt know what the left is doing, OBrien said of communications with the mill.

Mike Badgero worked at the mill over for 28 years. We just dont know what to do, he said at the meeting. The lay-off was sudden and unexpected, leaving workers with bills to pay.

Badgero and his wife, Mary, paid off their house once already, but when his wife was diagnosed with cancer in 2005, they took out another mortgage to pay for her treatments. They are struggling to get by now that Mike is only making half of what he used to at the mill. He finds small jobs, like plowing driveways and sharpening skates while Mary works part time in the kitchen at Roxys, a local bar, The lay-off has put the responsibility of family bread-winner on her shoulders. Still, we are dipping into savings just to get by, Mary said.

At the office of Michigan Works!, a workforce development agency, staff direct people how to collect unemployment and help them develop skills and find look for new jobs. And in their town. Harry Swanson, an instructor with Michigan Works!, advises people to look for work outside of Ontonagon. The towns unemployment rate was high before the lay-off, around 10 percent, he said. Now it is around 17 percent, one of the highest in the state, according to the states online report.

Tom Cogswell has been village manager for almost a year. In that time, I have seen a slower main street as families are really watching their pennies. Every business has been affected by the lay-off, he said.

The schools have lower and lower enrollment numbers over the past 10 years. John Shiner is the principal of the Ontonagon Area Junior-Senior High School. We had around 4,600 students enrolled K-12 in 1999. This year we have 520, Shiner said. The future of the next five years will depend on the mill, or any new businesses that move into the area, said Shiner.

Cogswell wants to highlight Ontonagons natural resources to attract new business to the area, taking advantage of the governors 2007 Green Initiative. But a lot of our fate for the next six months is in the economy as a whole, he said. Production of cardboard at the mill is directly related to consumer spending, Cogswell said, so More spending means more work at the mill.

The latest news from the company is that operations should resume as of April 1st. The fate of Ontonagon is the fate of many small towns across the nation grappling with downward economic spiral. It is also a reminder that more than the auto industry has sustained communities around Michigan.

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