The future of a cornerstone in the local economy is in question. After reports of recent layoffs that generated speculation in the community, Wausau Paper, which owns the paper mill in Rhinelander that has employed generations of workers, announced last Friday, Jan. 11, that it intends to sell the Rhinelander mill, as well as its mills in Mosinee and Brainerd, Minn.
Wausau Paper’s announcement was followed Monday, Jan. 14, by revelations of a standoff between the paper company and Starboard Value LLC of New York, a Manhattan-based hedge fund company that is Wausau Paper’s largest stockholder. Starboard was displeased with Wausau Paper’s announcement of their plans to sell. According to a letter from Starboard to Wausau Paper, just hours before Wausau Paper made their announcement, Starboard had nominated three people to Wausau Paper’s board of directors. Starboard accused Wausau Paper’s chairman, Tom Howatt, of acting in “bad faith” by making the announcement and charged the company with neglecting to make changes that would improve its bottom line.
In response to Starboard’s accusations, Wausau Paper countered with a letter on Tuesday, Jan. 15, pointing out that Wausau Paper “began evaluating operational strategies to better position Wausau for the future long before Starboard became a shareholder of Wausau Paper.”
While the two organizations are engaged in a drama that will be played out in distant board rooms, the consequences of their actions will impact many families and businesses in Rhinelander, Mosinee and Brainerd. The Rhinelander mill alone reportedly employs between 400 and 450 people.
Rhinelander Mayor Dick Johns, who was once an employee of the mill himself, was as surprised as anyone else by the news when “I got a call from Channel 7 TV last Friday night.” It was the first he had heard of the proposed sale, he said. He had heard the reports of layoffs and the rumors circulating throughout the community prior to the announcement, though. “At least that’s stopped,” he said.
If the mills in any of these communities were to close, the economic impact could be brutal. “We’ve got a lot of people in this community who are hurting over this,” Mayor Johns said. As for what’s going on in the board rooms in Mosinee and New York, “there’s no way you can control that,” he added.
However, he sees no reason to give up hope. “We’ve got to let this play out,” he said, noting that the mill is still running. And while it is, efforts are underway to keep it going. In the hope of trying to find a buyer for the mill, various agencies have been contacted, among them the Wisconsin Economic Development Corporation. While details aren’t available at this time, Mayor Johns said, “I have contacted them and they’re well aware of what’s going on here.”
A call to Wausau Paper’s spokesman was not immediately returned. The Star Journal will continue to follow the story as more information becomes available.