Too many times companies cut employees loose with little notice, leaving expended workers and their families out in the cold.

by Ken Patrick

A mass layoff, according to the U.S. Dept. of Labor, is a situation in which 50 or more persons have filed initial claims for unemployment insurance benefits against an establishment during a consecutive five-week period. During the past decade, there have been 168,775 mass layoffs in this country. A total of 93,153 occurred between 2001 and 2005, a 23% increase over the 1996-2000 period (75,622 instances). Of course most of those second-half layoffs happened in 2001-2003 when companies were laying off anything that moved.

The U.S paper industry was in the thick of the 2001-03 massacre, shutting down a hundred or so mills, sawmills, and plants, and cutting loose more than 100,000 employees. Lopping off such numbers of employees, in a way, is a form of self-mutilation—like lopping off your hands. Can an industry survive such a loss of experience and know-how? It's been said for the past million years that employees are the real asset base of a business or industry, rather than buildings and equipment. The next few years in North America are really going to test the validity of that adage.

But of course the real damage from mass layoffs is to employee families. I know workers, as does just about everybody, at some shutdown mills who were cut with less than a month's notice, after more than 40 years with the same company, at the same location, and basically the same job title—the one their father or mother had for 50 years. Swish. The end.

Stranded in the big chill between their last day at work and social security, things can get tough for families of such workers. Some companies though, to be fair, have done much better than others in this regard. Some have given five week's notice. That's why it was encouraging to recently read about one paper company's approach to the layoff dilemma.

From Job to Job
UPM began permanently shutting down its Voikkaa Mill in Finland this past spring. Production ceased in the summer. It had 678 fulltime employees. The company decided to launch a redeployment and employee support program known as “From Job to Job,” strangely designed to treat workers like humans.

So far, the company reports that 300 of the mill's employees have found a new job or training position under the program. More than 70 have found new positions within UPM, mainly in Finland, but also in Canada, the U.K., and China. Some 140-plus have been employed outside of the company with UPM's help. The company is paying entrepreneurial startup support to nine applicants, and 29 employees are in vocational retraining. Around 60 employees will stay on at Voikkaa until the end of 2007 for property maintenance, dismantling of paper machines, etc. The company will then help them find other jobs, many within the UPM structure. A total of 73 employees have joined the company's retirement scheme.

Empower Oy has hired more than 50 Voikkaa employees for its new unit offering forest industry maintenance services based at the mill site. The unit opened in September, and the company has announced it will hire more employees later in the year after demand levels are determined. Kouvola Cargo Handling, a storage services company also operating from the mill site, will hire 20 Voikkaa employees, 10 of whom have already started work. UPM says it is currently negotiating with other companies planning to set up business at the mill site.

By my numbers, more than 450 of the mill's employees currently have a job, are well on the way into a new one, or have taken full retirement. Some workers, especially younger, more recent hires at the mill, probably drifted away on their own accord after the mill closed. Things are still in the works for the remaining whatever, maybe 50 or so employees.

The Productivity Factor
Most large companies have employee redeployment programs, particularly for professional and longer-term employees. The Voikkaa program, however, extends to all of the mill's employees and is designed to help families and communities survive under a severe, mass layoff situation. The interesting part is that it is actually working, where few such programs ever do.

Employee job satisfaction and security are key elements of the total productivity factor. When workers know that companies really care about them, as UPM employees at other company locations must based on what's happening at Voikkaa, overall productivity has to be high company-wide.

UPM is proving that it's possible to close a mill without destroying employee morale, or its most important asset base in the process. The Voikka mill is now shutdown but much of its former employee experience and know-how are preserved either directly or in indirect affiliated operations. North American mills should take notes.

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