Roy Houseman helps hold the line at Smurfit-Stone

Roy Houseman attended the Local 885’s regularly scheduled standing committee meeting with Smurfit-Stone Container Corp. last Thursday expecting to cover normal business—training schedules and the like. If he was lucky, the 27-year-old president of the local steelworkers union thought perhaps he’d hear an update on the shutdown of the Frenchtown plant’s No. 2 linerboard machine. That November suspension, attributed to “market-related downtime” and extended until the end of January, laid off 52 of the mill’s approximately 370 workers, including Houseman. 

But just before the meeting one of Houseman’s fellow committee members mentioned troubling news—word was Smurfit-Stone’s stock had dropped more than 83 percent to just 6 cents during early trading. Houseman logged onto his laptap and not only confirmed the report, but also learned why: That morning’s Wall Street Journal quoted anonymous sources saying Smurfit-Stone, one of the country’s largest makers of cardboard boxes, was considering Chapter 11 bankruptcy.

Smurfit-Stone officials offered few details in the standing committee meeting, but it hardly mattered. Houseman already knew the immediate concern. Under Chapter 11, the company would likely look to cut union wages, pensions and benefits. Houseman anticipated calls from concerned union members—171 of whom started working at Smurfit-Stone before Houseman was even born.

“When I got hired on there, the average worker’s age was 55,” says Houseman, who was hired at the mill just three years ago. “There are people who have been working there since 1968. You’ve got people with 40 years of service. Their pensions, all of these benefits that they’ve worked years to defend and to earn through the contract process, all of it is potentially on the chopping block. I can’t explain to you the level of my concern.”

Houseman spent the rest of the day speaking with his union’s regional office in Billings, calling lawyers in Pittsburgh at the United Steelworkers’ (USW) headquarters and, as expected, fielding dozens of calls from union members.

“I’m kind of a young buck in this game, but I’m learning fast,” says Houseman. “I’ll admit, it’s been a whirlwind. It wasn’t just a rough day, it’s been a rough year.”

The Local 885 voted Houseman president in January 2008. Over the next 12 months, the University of Montana graduate—he double-majored in English literature and psychology—has dealt mostly in crisis management. The mill downsized in February, announced the 52 additional layoffs in November and the company’s current financial standing appears bleak. According to the Journal report, Smurfit-Stone has $3.5 billion in outstanding debt and $316 million in debt payments due this year. The Journal also noted that Smurfit-Stone’s $3.54 billion employee pension plan was underfunded by $407 million at the close of 2007—a number expected to have expanded considering 59 percent of the plan was invested in the stock market. Making matters worse, a different article the day before the Journal report noted the company’s executive officers received more than $1.4 million in cash bonuses for fiscal year 2008.

When contacted by the Independent, Smurfit-Stone spokesman Mike Mullin declined comment on the potential bankruptcy filing and executive compensation. He added there had been no change in the status of the No. 2 linerboard machine.

“It’s bonkers,” says Houseman, who is paid $3,000 for his position as local president. “Here they are paying fancy CEO pensions when here, what do they do? Downsize and close facilities. Thanks. Thanks a lot. You can blame the market for a lot of the current problems, but come on.”

The situation leaves union members like Chris Johnson frustrated. The 57-year-old log yard worker started at the facility 20 years ago and hopes to retire by age 62. He says he’s “scared, pessimistic, but hopeful” about the company’s current state.

“I have very pro and con attitudes,” he says. “I’m still employed, I work hard and make good money, and I give Stone Container credit for a lot of the improvements they’ve made on the environmental front…But that whole CEO bonus thing? Come on. We’ve got employees starving out here. What is it Michael Douglas said? ‘That greed, for lack of a better word, is good.’ That’s them.”

Johnson also feels for Houseman, both in his role as president and as a laid off worker.

“I think he’s doing a good job in a very tough situation. I’d give him good marks,” says Johnson. “The best thing is that he shares information with us as best he can, which is important in that position.”

Communication is one area Houseman takes pride in. During a recent interview he stopped to answer his cell phone and kept his laptop open to check e-mails. Last year, he revived a monthly newsletter that’s posted at the mill and created a text message list that currently includes 50 union members. He also volunteered to speak at the 2008 USW Constitution Convention, pushing for a wood products initiative from the union.

“Most of the speakers would get up in front of 5,000 steelworkers and introduce themselves: ‘I’ve been working 30 years and served as local president 20 years,’ or something like that,” he recalls. “I got up there and said, ‘I’ve been working three years and been president six months.’ I mean, they laughed. But what this does is allow me to provide a unique perspective, approach some things in a different manner.”

It may not be enough to save the mill—or even his own job—but Houseman remains resolute.

“Unfortunately, there’s not a lot we can do to control whether Smurfit-Stone files for bankruptcy or not, but we can fight for our brothers’ and sisters’ rights,” he says. “We’ll do what we can. That’s what the union is all about.”
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