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Fort James Corp. plant to close

February 17, 1999|By DON AINES

CHAMBERSBURG, Pa. - Competition in the packaging industry is being blamed for a decision to close the Fort James Corp. plant in Chambersburg later this year.

The 140 salaried and hourly workers were told of the decision Monday, according to Mark Lindley, a spokesman for the Deerfield, Ill., corporation. He said the closing process will begin in June and end in November.

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"The packaging industry remains extremely competitive," Lindley said Tuesday.

Fort James was formed two years ago when James River Corp. of Richmond, Va., merged with Fort Howard Corp. of Green Bay, Wis., he said.

Because of the merger, Lindley said the company had to downsize to increase efficiency and maximize savings.

"There's more suppliers than there is demand," said Mark Lynch, president of the Graphics Communications International Union Local 712S, which represents 225 hourly workers. He said about 100 workers had been laid off before Monday's announcement.

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The union local president said he worked there 15 years before being laid off last year. He said the closing announcement was a surprise despite recent layoffs and the removal of some machinery.

The plant prints folding cartons for candy giant M&M Mars and Unilever, which owns Lipton Tea, Breyers ice cream and other well-known brand names, Lindley said.

During the past few years, Lindley said, James River and Fort James spent about $10 million modernizing the 414,000-square-foot plant on Wayne Avenue.

Lynch said most employees have been there 20 years or more and the wage range is $12 to $19 an hour.

The union was about to begin negotiations for a new contract, but will now be looking at "closure bargaining," Lynch said. That involves severance pay, pensions, insurance, holiday and vacation pay and other issues.

"Some will be eligible for retirement, but a lot will fall short of that," Lynch said. Some employees have been with the plant since it opened in 1961, he said.

Franklin County Area Development Corporation Executive Director L. Michael Ross said his group will meet with the company to discuss the services available to disclocated workers. He said it will also work with Fort James in marketing the building to potential buyers.

"Anytime a community loses a Fortune 500 company ... it's bad news," Ross said.

On a more positive note, he said there are about 80 printing companies between Shippensburg, Pa., and Winchester, Va., that could hire Fort James workers.

Ross named off Quad Graphics in Martinsburg, W.Va., Phoenix Color in Hagerstown, Md., and Fairfield Graphics in Fairfield, Pa., as potential employers of displaced workers.

He said the building should be marketable because of the widening of Wayne Avenue, rail access and other amenities.

"A number of downsizings and closures have been related to changes in corporate ownership," Ross said of recent layoffs in the county. He cited the closing of Van de Kamp's Chambersburg frozen food plant in October and more than 450 layoffs at Grove Worldwide in Shady Grove, Pa., as examples.

Despite the layoffs, Franklin County's unemployment rate has declined from 4.9 percent in 1997 to 3.8 percent last year, according to the Pennsylvania Department of Labor and Industry.

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