roberttosh wrote:Are things at Rumford and Jay really as bad as everyone has been saying? Paper is obviously not used like it was in the old days, but I can't see where we get a rid of it altogether any time soon and plus didn't Jay just convert a machine to making a specially packaging type of paper for the food industry? Not sure why everyone seems to be convinced both mills are living in borrowed time....
Verso is for-reals Chapter 11 bankrupt. So yes, Jay is at mortal terror threat for sudden closure or downsizing depending on how the company gets restructured. As Verso is a pretty vast (and vastly messed-up) conglomerate the reorg puzzle pieces that trigger decisions on Jay's future more likely than not have absolutely nothing to do with Jay, making a prognosis doubly unpredictable. If court-approval of the reorg plan requires sacrificing one plant so the pieces fit and ledgers balance on some
wholly unrelated sector of the company, things can change very suddenly and out of left field.
If Jay falls Rumford destabilizes in a big way. Their rail rates increase a lot, and with the rest of the printed paper supply chain in New England gone post-Jay they are saddled with additional price inflexibility on expenditures because of their more extreme regional isolation as last man standing. Their owners are in British Columbia and manage several regional clusters of plants, some of them likewise operating at less-than-full capacity because of the decline in demand. If Rumford becomes a far-isolated outpost with no additional cost efficiencies to wring because of the disappeared Maine supply chain, if forced with a choice of pruning a plant in the Midwest situated where they have several plants...or pruning Rumford over a thousand miles away from any other company holdings...Rumford zooms much further up the list. It most definitely does NOT become stronger by being the last game in town...quite the opposite. So Rumford could be closed even if it's presently operating at outright higher capacity and profitability than another company plant in a different region, simply because Rumford's extreme regional isolation in a post-Jay world is that much of a liability to the continentally-distributed conglomerate that owns them. Absolutely no interests inside the state of Maine will have any bearing on how this plays out. Shareholders and execs who've never set foot in Maine are going to be making those decisions off a spreadsheet and formulas about which potential moves do what to the stock price. You can throw the sum total of local, on-the-ground knowledge out the window when making a stab at a prediction, because it'll get decided very far away by strangers chewing on very abstract financial models.
Yes...this is a highly volatile and unpredictable situation that won't have any clarity you can place betting odds on until a clear picture takes shape of Verso's final Chapter 11 reorg plan. Best case is Jay gets lucky in the reshuffle and winds up +1 higher priority in the corporate pecking order, which in turn answers enough of Rumford's owners' questions about the disappearing supply chain for status quo to be a safe choice from one Five-year Plan to the next. Worst case is Jay winds up odd-man-out in the reorg, gets scuttled like Bucksport did because nobody's interested in buying a plant that no longer has a robust regional supply chain, and the falling dominoes send Rumford's owners heading for the exits. Right now it's a total crapshoot where any extreme and any point in between is possible, and developments are highly month-to-month volatile because of the nature of Chapter 11 negotiations.
