Canton, N.C. Employees Save Mill Jobs

Iconic Communities, On the Road
on April 15, 2001

Alton Higgins isn’t a typical numbers cruncher. With nearly 25 years as an employee at what is now Blue Ridge Paper Products, Higgins is more rolled-up sleeves than buttoned-down collars.

But when Champion International Corp., the largest employer in his hometown of Canton, N.C., (pop. 3,673) was on the verge of disappearing just a few years ago, Higgins quickly received hands-on training in Economics 101. As a key player in the effort to save some 1,500 jobs that would have been lost had Champion shut its doors, Higgins was crunching numbers in his sleep, in his coffee cup, and probably in his prayers.

“To put into perspective how important Blue Ridge Paper is to the economy of Canton, we have an annual payroll of $85 million,” says Higgins, who chaired a committee of employees who live in and around Canton that helped generate a historic employee buyout of Champion. “And (considering) what the experts and financial people call the economic multiplier, you’re looking at two-and-a-half times that (in revenue) just for the area. You can see what kind of effect that has had on this area.”

It’s difficult to find anyone in the hilly town of Canton whose life wasn’t somehow affected by Champion International, a paper-producing plant that had been in operation here since 1908. The area’s largest industry, at one time it employed as many as 8,000 people. So when the company announced in October 1997 that it was selling its operations, a pall settled over Canton like a thick mountain mist.

“It scared us,” Pisgah High School Principal Dyatt Smathers says of the uncertainty of Champion’s decision. “It was frightening to know we could lose something we had become so accustomed to having here through second and third generations of families. We thought they were going to close the doors, lock the doors, and never reopen the doors. It would have had a significant impact on our school. So many of our students have families whose livelihoods depended on Champion.”

Soon after Champion’s announcement, Higgins and other hourly employees formed a committee to research the possibility of an employee buyout. After an initial bid to Champion fell through, the employee stock ownership plan (ESOP) members received a boost when an investment firm from New York came on board. KPS Special Situations Fund and the employee committee made a bid in December 1998, which Champion accepted a month later.

KPS put up $35 million toward the purchase and got 55 percent ownership. The employees received 40 percent ownership, with their investment coming from a 15 percent reduction in wages and benefits for seven years. And the remaining 5 percent ownership is held by senior executives of the new company. Blue Ridge Paper Products, with headquarters in Asheville, began business May 14, 1999. It’s now the largest employer in Haywood County.

Needless to say, it’s been an adjustment for the 1,600 employees at the Canton location. “After 90 years of (Champion), it has taken some time to change that culture from punch-the-clock to ownership,” says Higgins, who works in electronics and instrumentation. “The hourly employees are involved in virtually every aspect of the business.”

Despite the culture shock, Blue Ridge Paper has made significant strides over the past two years. The company has been a sure source of pride to the area, says Canton Town Manager Bill Stamey. “They’ve worked very hard, and I think they’ve done a good job,” says Stamey, who has held his title since 1968. “I know they’ve made some improvements to keep them competitive.”

Blue Ridge Paper is particularly mindful of its continued environmental efforts. Since Champion invested $300 million toward a new pulp mill in the mid-1990s and drastically reduced pollutants entering the Pigeon River, which runs through town, Blue Ridge Paper has done the utmost in keeping that commitment. The company recently was awarded special recognition by the Environmental Protection Agency for its efforts.

“We received support from many different environmental groups throughout the buyout,” says Higgins, “and we continue to work with those people to alleviate the fear of environmental hazards.”

Nearly two years have passed since the changeover, but many residents still remember those uncertain times.

“You just can’t imagine the emotional ups and downs we went through,” Higgins says. “We had some major arguments (on the committee), but we always kept drawing ourselves back to (the fact) that this is the best thing—the right thing to do—for all the employees and the community.”