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Home > Blogs > Hamilton News and Issues > Archives > 2009 > March > 03 > Entry
No mention of job losses in deal between Mohawk, SMART paper companies
Mohawk Fine Papers, Inc. and SMART Papers both released today, March 3, details of a deal between the two Hamilton paper companies.
Mohawk is purchasing and taking over production of several brands of SMART Papers, and becoming the “exclusive marketer” of two other brands. SMART Papers announced that it is “expanding” production of its two remaining brands, but will idle two paper machines.
Neither press release mentions anything about job losses. However, Rick Farley, president of the United Steelworkers of America Local 1967, was informed Monday morning, March 2, that about 200 union jobs will be lost, not including the loss of dozens of salaried positions, in the acquisition.
Mohawk Fine Papers Press Release
Permalink | Comments (2) | Post your comment | Categories: Local business
Comments
By Citizen
March 3, 2009 9:45 AM | Link to this
I sure hope Smart Paper is caught up with their back taxes and utility payments. They have owed the city a lot of money in the past, Hamilton needs to agressivly go after them before the plant gets shut down completely.By Remember -?
March 3, 2009 11:26 AM | Link to this
As I mentioned when they filed BR a couple years ago, Smart will be absorbed into another organization. This move allows them to highly eliminate their sales and marketing expense. This move also makes them a “net” producer or contract producer for the most part. While they will sell select coated grades direct, that market is limited and continues to decline. Unfortunately this is another step towards a final closing…they will have very little influence over the market now and will become dependant on MH to bring them the Coated volume. This move is a result of the marketplace and a private equity owner who says “enough is enough. I feel bad for the employees losing their jobs, including all of the sales and marketing folks hired last year. MH is unlikely to bring these folks over as they are also attempting to hold the line on sales expense, while leveraging the new tons across their internal infrastucture and existing/growing distribution channels. In addition, the move will increase MH leverage across the merchant base, which is not necessarily good news for the end customer…leverage doesn’t always equal lower pricing for the marketplace. My group looked at this business and determined the volume is decreasing by grade and will only serve as a short-term volume boost for any purchaser (buyer). The asking price for the rights, inventory and volume make it attractive if you are a cash rich buyer…but it doesn’t solve the long-term challenges of the energy, raw material, freight segmentation and reducing volume of the of the industry and its products. Good move MH…you bought it at an attractive price…but it won’t solve the industries and your basic issues…you’ll be a surviver but not a thriver! Only thing more facinating would be for the City of Hamilton to buy what is left of Smart and become a owner and producer of paper. The return on investment on the $30 million dollar energy project sure looks like a brilliant move now…another reason the equity owner said we are done here! I’ll be back with more comment…for now it is time to conclude the next deal with a seller looking to get out of the business…stay tuned paper people!