Vermont Plywood Closes,
35 Lose Jobs
By Martha Slater

Three years and almost three months after it began production on June 15, 2004 with 40 employees, Vermont Plywood has closed down.

"As of Friday, Sept. 7, the Union Bank of Morrisville, Vermont Economic Development Authority (VEDA), and Rural Development have taken over the property," company owner Dan Davis told The Herald. "We had a temporary layoff three weeks ago, in hopes that things would turn around by Labor Day, but that didn’t pan out."

When it began, in the former Chesapeake Hardwood Products mill on Route 100 in Hancock, Vermont Plywood was able to use a lot of the equipment already in place. Davis told The Herald then that he expected to produce the same type of plywood products that were made by Chesapeake, the former owner, which was their only customer at that time. For a variety of reasons, things didn’t work out as planned.

"It was a combination of a lot of things," Davis said September 7. "It started in the first year when Chesapeake reneged on an agreement to supply a contracted amount of product, and so we had to go to litigation. We didn’t have enough money to settle the lawsuit, so we had to cut our losses and go on. We never recovered from that."

Davis added that, "For the past year, we had worked with two Canadian companies that said they needed a lot of product, but they never ordered more than an average of 500 panels per day and we needed to make 1,000 panels per day to break even. Along with the downturn in the housing market and having to compete with Chinese imports, we just couldn’t keep our head above water."

Davis also said "the eight partners that helped put the equity in to get us started just didn’t continue to support the project. I kept it going as long as I could." He said the lenders would attempt to liquidate the property, either by auction or outright sale.

State’s Viewpoint

"My understanding is that the business has been seriously wounded by under-capitalization at restart, combined with the choice by Chesapeake, the former owner, to not honor their purchase contract with Vermont Plywood," said Robert De Geus of the Vermont Department of Forests, Parks & Recreation.

"As far as I have been concerned, there is ample market for specialty wood laminates (plywood) made for specific customers. In fact, the whole idea of making specialized wood products in Vermont versus commodity products is what the state has been striving for over the past 20 years, with the usual varying degrees of success."

Indeed, state officials worked hard to help Vermont Plywood get started, and Gov. Jim Douglas took a personal interest in finding a buyer for the plant when Chesapeake closed down. Soon after the Hancock Selectboard supported a plan for tax stabilization, VEDA approved a $640,000 loan. Gov. Douglas also came to Hancock to announce the awarding of a $730,000 block grant from Vermont Community Development.

What Happens Now?

Right now, the Stockton Security Service is on the mill premises, as well as Davis, who is cleaning out his files. Several other concerns or companies that stored materials on the property are removing those. According to Elsie Carden, who worked in the office at Vermont Plywood, it will probably take about two weeks to accomplish that.

"I assume the security service will be present until the property is sold," added Carden, who had worked at the mill for 18 years. She said she saw the closure looming, "but decided to ride it out to the end. I have no immediate plans for the future, but I’m looking."

Carden noted that many Vermont Plywood employees depended totally on the mill for their livelihood, "in some cases, both the husband and wife worked there."

On September 6, the mill’s 35 employees met with a representative from the Vermont Dept. of Labor, who outlined what help they could get, including the possibility of extended unemployment benefits and additional training to help them find other jobs.

"We had a really good team of people working here," Davis said. "I couldn’t put into words just how hard they worked to keep us open."

Jane Andrews of Hancock had worked at the same location for 37 years; first for Weyerhauser for 21 years and then 13 years for Chesapeake, before working for Vermont Plywood.

"I did panel repair, and I liked working there because I enjoyed the work and the people there," Andrews said. "Almost everyone who was there had been there a long time—we’re like a family. The money was decent, it was close by, and we had health insurance."

Right now, Andrews, said, she’s "scouting around looking for work. I was 19 when I started there, and I’ve never had to travel out of the valley, but I may have to if I can’t find something in the area. I just hope someone will buy the mill and re-open it."