Louisiana Pacific Corporation could pay Clarke County, Albama, up to US$1.5m over the next three years for defaulting on its agreement to operate its new OSB mill with at least 130 employees, reports Editor & Publisher.
The $260m OSB mill south of Thomasville started it up in March 2008, but was shut after an explosion two months later. It was set to resume production in October but LP kept it shut for market reasons.
The company continued to pay more than 130 workers since that time but gave notice in late November of its intentions to terminate them in 60 days
The original project agreement called for LP to open the mill and to employ at least 130 employees for a year. LP did not do that and county attorney Bruce Wilson said the original agreement “clawback provisions” could run anywhere from US$2.5m to US$3m, depending on interpretation of the agreement.
LP has been cost-cutting at every level of the organization to ride out the economic downturn and has stressed to county officials that Clarke County is its flagship OSB plant. It has every intention of getting the mill up and running once the market recovers sufficiently.