The future of the Old Town mill was once again thrown into jeopardy this week, with its doors abruptly closed and 180 people thrown out of work.

There had been rumors swirling for months that the mill was in possible trouble, and those rumors were confirmed last Wednesday, when the mills was closed without prior notification to employees at about 4:30 p.m.

The public was notified in a brief statement from Everett Deschenes, the mill’s director of market pulp and fiber, who wrote: “Effective immediately all Old Town mill operations will be indefinitely suspended. The impact of foreign competition and our competitive position due to high wood and energy costs have made it difficult to sustain operations at this time. All employees not needed for securing the facility will be furloughed. During this idled period ownership will be pursuing options to secure the long term viability of the facility” – which, according to what city officials were told, means a new buyer is being sought for the mill – “The mill is keeping a core group on to maintain mill through fall.”

At the time the mill closed, it employed about 210 people, meaning a skeleton crew of about 30 people will stay on.

Paper industry officials later cited competition from foreign manufacturers as a reason for the closure, along with ongoing problems with the biomass boiler. Air emission problems with the boiler have plagued the mill for several years now, and the past few months were particularly nettlesome; reportedly, the US Environmental Protection Agency recently assessed a fine of $126,000 for those violations.

Reaction to the news was quick from officials at all levels. In an email statement to the Times, Gov. Paul LePage said he was very concerned that these layoffs came shortly before school starts, when workers were planning to buy school supplies, clothing and other necessities for their families; Lepage added that he was looking into whether the closure was a temporary furlough or permanent layoff; if it was the latter, then under Maine law displaced workers would be entitled to severance pay .

The governor also claimed that high energy costs, something he has been focusing on for years, was a major factor in the closure of the facility, and said that he has been advocating tirelessly for expanded accessibility to natural gas and hydroelectric power to reduce energy costs. Reportedly, however, the mill had the option in the last of locking into a low cost natural gas contract, but opted not to do so.

Officials at both the state and local level tried to put a positive spin on the closure, noting it has happened several times in the past.

“Our primary goal is to get this mill back up and running as quickly as possible. The Old Town mill remains a very valuable asset¸said Department of Economic and Community Development Commissioner George Gervais. “We are optimistic, that as we move forward, the facility will be able to attract additional private investment so that operations can resume.”

In a joint statement, meanwhile, City Manager Bill Mayo and Council Chair David Mahan thanked Lynn Tilton, chief executive officer of Patriarch Partners, for purchasing the mill in November 2008, as well as employees of the mill.

“ The city has faced this situation before and we will keep moving forward,” they said. “The city will work with the mill and state officials to try and find a new buyer and keep Old Town moving forward in a positive direction. They have spoken with several buyers and are positive on a sale.”

Any sale of the mill, for which Tilton paid $19 million in 2008, will probably require untangling a financial mess. The city has tax liens on the mill, which was assessed at $27 million this year with a like amount in personal property; some vendors also have complained of not being paid, with the amounts owed to some, according to sources, totaling hundreds of thousands of dollars.

News of the closure of the mill led members of the Maine Legislature and Congress to vow their support for the idled workers.

“This is devastating news for these dedicated and hard-working employees and their families, many of whom have worked at Old Town Fuel and Fiber throughout their entire careers,” said Senator Susan Collins . “While it is my hope that the company is purchased and these employees are brought back to work, increased foreign competition continues to present serious economic difficulties for the paper industry, which is why it’s absolutely essential that trade agreements be fair to American workers and open new markets for American products. Should the mill file a petition for Trade Adjustment Assistance benefits, I stand ready to urge the Department of Labor to swiftly approve its application, so that these affected workers are eligible for employment training in another job or career, income support, job search allowances, and relocation services for individuals who obtain jobs outside of their normal commuting area.” Mill officials have already indicated they will seek the Trade Adjustment Assistance benefits, which provide workers with opportunities to obtain the skills, resources, and support they need to become reemployed.

“The announcement that 180 workers will be losing their jobs through no fault of their own is shocking and deeply unsettling. This is horrible news that will have an impact on these families and on the community as a whole,” added State Sen. Emily Cain. “My heart goes out to all the families affected by this devastating news, and I will do whatever I can to help those impacted in the months ahead. Old Town has suffered similar setbacks before and is a community of tough, resilient, and hardworking people. I am confident that by working together, this community and these workers and their families will get through this challenging time.”

A Rapid Response session from the Maine Department of Labor was scheduled for Tuesday, August 19 at 2 p.m at the Union Hall on Maine Street. All current members who were working at the mill were encouraged to attend and get information about unemployment, as well as their spouses.

Tilton’s Patriarch Partners, which is based in New York City and has made is mark by buying distressed companies and revitalizing them, did not respond to request for comment on the mill’s closure.

This week’s closure was the latest dip in a roller coaster financial ride that was has been going on at the mill, where production began as a sawmill in 1860 before the Penobscot Chemical Fiber Company was formed and started making paper in 1882, for years now, starting in 1997, when former owner James River merged with Fort Howard, leading to the formation of Fort James; Fort James was bought by Georgia-Pacific three years later, which three years later started massive layoffs and shutdowns due to sagging market conditions. Attempts to save the mill by the state buying the Juniper Ridge landfill staved off its closure for two years, when Georgia-Pacific closed down production at the end of 2005; the following year, Red Shield and three partners bought the shuttered mill for $1, but red shield filed bankruptcy in 2008, leading to another closure until Patriarch bought the facility and reopened it in 2009.

Just six months ago, mill officials were painting a rosy picture for the future at Old Town Fuel and Fiber, which was working on plans to diversify by transforming the sugar in wood pulp into ethanol. It was claimed that would create up to 30 new jobs in the months ahead – but instead, 180 people are now out of work.

The closure also affects UMaine’s Forest Bioproducts Research Institute, which has been partnering with the mill – which received a $30 million grant for the ethanol wood pulp to ethanol project in 2008 – on research and development. UMaine officials, however, joined in the optimism of others, saying the closure is just a temporay delay in research and development of alternative fuels.