As Boise layoffs hit, trying to make new jobs in International Falls

Bill Schrader
Boise employee Bill Schrader talks about his final week on the job while eating some cake a day before his last day at the paper mill Wednesday, September 25, 2013 in International Falls, Minn. Schrader is among about 265 Boise employees who are being laid off. (MPR Photo/Derek Montgomery)

INTERNATIONAL FALLS, Minn. – Today is Bill Schrader’s last day at the enormous Boise paper mill, which anchors this small city on the Canadian border. After six years at the mill, working as fifth hand on the number four paper machine, Schrader is one of 265 workers who will be out of a job as part of a major layoff here. By this Monday, two paper machines and a coating machine will be shut down and a third of the mill’s workforce eliminated.

“Thursday is my last day,” Schrader said. “Saturday I’m leaving. I’m going to Milaca.”

Schrader will move out of his grandmother’s house, where he’s been living temporarily, into a friend’s house 250 miles south, near St. Cloud. “I need somewhere to go,” he said. The plan is that in three months, the 30-year-old body builder will start school at Minnesota State University-Mankato, enhancing his existing associate of arts degree to become a registered dietitian. He’ll get a Boise severance package and help with school tuition through a federal program called Trade Adjustment Assistance.

The fact that some Boise workers like Schrader are leaving town for training or jobs elsewhere is worrisome to International Falls Mayor Bob Anderson. Anderson, who worked at Boise for 51 years, is part of an effort to diversify the economy and create more jobs beyond the mill in this city of 6,400 people.

International Falls is like a lot of small, rural cities looking to remake their economies as the job base shrinks in more traditional industries, like manufacturing. Yet, this city is also remarkable for its geographical isolation and naturally beautiful surroundings. Located across the Rainy River from Fort Frances, Ontario, and at the edge of Voyageurs National Park, it’s 100 miles to another American city of any size.

Anderson and others here are engaged in concerted discussions about economic possibilities as far ranging as data centers, storage or assembly related to rail traffic crossing the border from Canada, biomass energy, a plasma process that turns waste into fuel, increased tourism, the harvesting of peat from bogs and more computer-based jobs like those at a UnitedHealth Group claims processing center in town.

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International Falls mayor Bob Anderson (MPR photo by Derek Montgomery)

Calling the Boise layoffs a “calamity,” Anderson helped establish a series of “economic response teams” made up of citizens addressing issues like business development and retention, worker assistance and long-term vision and strategy. By design, they operate without elected officials aboard. “If you do the same things you’ve always done, you’ll get the same results you’ve always gotten,” said Anderson.

“I would like to see a greater number of living wage jobs in the community, and opportunities for the young citizens,” he said. “When I graduated from high school, there were jobs in the community. Opportunities for people, that is the real key.”

“The other piece is we need to ensure that the 580 jobs (left at Boise) are going to remain,” he said.

Matters were further complicated here last week, when Boise Inc. announced it would sell by the end of the year to Illinois-based Packaging Corporation of America, which specializes in cardboard and boxes, rather than paper.

Local people are understandably nervous, though many are trying to remain optimistic. They hope that a company like PCA will see the value in the mill here and maybe even add a few jobs.

“I like the fact that we’re going to be owned by people in the paper business,” said Koochiching County Commissioner Rob Ecklund, who also works at Boise. “The current owners of Boise are investment people. They are the traditional bean counters. I am hoping the PCA takes a longer view of investing in the facility.”

After the layoffs were announced in May, staff from the University of Minnesota Duluth and U of M Extension produced an “economic emergency report” predicting the job loss would punch a $200 million annual hole in the local economy, when you consider how wages are spent in cafes, stores and other businesses during a year. The laid off employees earn a combined estimated income of more than $26 million, said the report, when benefits are figured in.

The elimination of so many local Boise jobs will serve an economic and emotional blow to the area. It’s hard to find anyone here who doesn't work for Boise, hasn't worked for Boise or doesn't know someone who works for Boise. The mill occupies the center of International Falls both literally and metaphorically. You can’t turn a corner without seeing the white on blue logo or a tall stack with steam coming out of it.

In the past, people have believed that once they got on at the mill, they were set. They bought the truck, the house, the boat and maybe a hunting shack. And they expected to work for decades at a decent salary to pay for it all. Now that future, once a given, seems harder to grasp.

The problem is there aren't a lot of other high-paying jobs in International Falls. So the question is, what will fill the economic gap?

Koochiching Economic Development Authority Director Paul Nevanen has a lot of ideas, including creating business around international trade and rail transportation. The county and city co-own a “foreign trade zone,” where a company could store or assemble goods transported from Canada, on the way to Chicago or elsewhere, without paying customs duties or other fees. But so far, aside from a Canadian National Railway customs inspection center, nobody has taken advantage of the zone. For the most part, it remains a field of rock and wetlands.

Koochiching County Economic Development Authority Director Paul Nevanen (MPR photo by Derek Montgomery)

Nevanen is working to promote entrepreneurial endeavors here too, like a new business downtown called Swanky Sweet Pea, which sells bath products shaped like cupcakes and other desserts to over 800 stores around the country. The company was started by International Falls native RaeAnne Conat, who recently moved back from Washington state to open her storefront. “When I acquired a large account two years ago, I had to come here,” she said. “It made more sense financially. In Tacoma, you are paying $1,200 a month for a facility at least. Here I pay $550 a month including utilities. It’s crazy.” She credits Nevanen and others with promoting her business and helping it grow.

Nevanen believes it won’t be just one thing that will boost the economy here. “I hope it’s a combination of things,” he said. “We need to diversify beyond timber and tourism. We need to get a manufacturer in the trade zone. We have cheaper real estate and utilities than the larger cities. We’re competitive. We have to make a strong business case. We have to have a compelling storyline… It’s so loud out there with all the competition.”

“We’re working every angle,” he said. “It’s a shotgun approach. We’re in a difficult position.”

But the fruit of these efforts won’t come soon enough to keep Schrader in International Falls. Today, he will cease to be part of a crew that turns a “wet pile of mush” into neat roles of paper. He’s worked at Boise alongside his mom, who gave up her job voluntarily to open a spot for somebody else, and his stepdad, who will stay on at the mill.

“When I was young, I remember multiple times telling my mother there was no way I was going to work in that paper mill,” said Schrader, who also until today served as vice president of his union, United Steelworkers local 159. “And that is exactly where I ended up.”

Schrader is optimistic about the future, but also conflicted about leaving his home city, where his 9-year-old son lives with the boy’s mother. “I got the big push,” he said. “This might be good… It has to be. I have to view it as it’s going to be the best thing that ever happened to me.”

The stakes are high in International Falls and Ground Level will follow efforts here to forge a more diverse economic future in the coming months as part of our project “Rethinking a Company Town.”