Resolute Forest Products is cutting 222 jobs at its Calhoun, Tenn., plant as it shuts down newsprint production operations and puts more focus on making tissue.
The job cuts will leave the McMinn County facility with about 491 people, said company spokeswoman Debbie Johnston.
Earlier this year, the company announced it was shifting from paper to tissue production at what is one of America's biggest pulp mills to help ensure the future of the facility, which had made newsprint since 1954.
"The goal is to turn the facility around so it can become profitable and a target for future capital investment," Johnston said.
John Gentry, McMinn County's mayor, said the decision is "a hit to the region." Because of the plant's close proximity near the Bradley County line, both counties will share the job losses, he said.
"No one likes the uneasiness, the uncertainty that goes with layoffs," he said. "Historically, it's one of the higher wage employers. That will have a significant impact on the local economy."
The Montreal, Canada-based company that operates the factory, which for many years was run by Bowater, is closing two of the plant's paper machines. The closure will take place no later than Sept. 30, according to Resolute, resulting in the reduction of 356,500 metric tons of paper production capacity.
However, market pulp production capacity at the mill will increase by more than 10 percent, the company said. The tissue operation has an annual production capacity of 60,000 metric tons of premium tissue.
Also, one of the plant's paper machines has the capacity to produce 148,000 metric tons of uncoated groundwood and bag paper grades annually. In addition, a pulp dryer has an annual capacity of 183,000 metric tons of southern bleached hardwood kraft pulp.
Over the past three years, Resolute has invested $400 million in capital improvements at the Calhoun mill, including construction of the state-of-the-art tissue machine and converting operation, and a continuous pulp digester, which will all continue to operate.
Resolute Chief Executive Richard Garneau said earlier this year in Calhoun that the tissue market is growing by 1.5 to 2.5 percent a year.
Gentry said the plant has a future and hopefully will expand moving ahead. For those who are losing their jobs, he said the labor market is strong in McMinn and the region.
"The jobless rate is pretty low," Gentry said.
Resolute acquired the plant in 2007 with the merger of the former Abitibi-Consolidated and Bowater, and the site was one of the earliest newsprint plants in the South when it was built in 1954.
The company owns or operates some 40 manufacturing facilities, as well as power generation assets in the United States and Canada.
Contact Mike Pare at email@example.com or 423-757-6318.
This story was updated Aug. 15 at 10:20 p.m. with more information.