Victory for Maine's wilderness, setback for paper company. Loss of clout forces firm to think smaller

A bald eagle floats high above the West Branch of the Penobscot River, searching for salmon in the white-water rapids. The majestic bird might not know it, but his scenic habitat in northern Maine has just been spared. Two weeks ago, the Great Northern Paper Company, Maine's largest employer, abandoned its plans to build a hydroelectric dam here after a decade-long battle with sportsmen and environmentalists. If it had been built, the dam at Big Amberjackmockamus Falls would have flooded one of New England's most popular fishing and rafting areas.

Thirty miles downriver in Millinocket, however, workers in Great Northern's paper mills don't feel quite as spared.

It's not that building the dam at the so-called ``Big A'' falls would have prevented massive job layoffs; even before scrapping the plans, Great Northern president Robert Bartlett said that up to 35 percent of the mills' 3,900 jobs would be phased out over the next few years -- with or without the dam. But to many workers, the Big A dam represented their last hope that the company had the power to protect their jobs and mill-town ``habitat.''

For many people, the dam's defeat affects more than the bounty of one mill town or the beauty of one wild river deep in the Maine wilderness. Environmentalists across the nation consider it a symbolic victory for every river that is threatened in the United States. Dam supporters worry that out-of-state investors may be dissuaded by Maine's sticky regulatory process.

The failure of the dam also shows the waning influence of Great Northern, a company that has wielded enormous political and economic clout since it took control of the West Branch of the Penobscot River at the turn of the century.

``There have been times when they could steamroller their way through [the Legislature],'' says David C. Smith, a University of Maine professor who has written a history of the US lumber industry. ``But in the last 15 years, since their merger with Nekoosa Redwoods, many people have felt that they didn't have as much of the interests in the state of Maine at heart. . . . There's been a shift away from the symbiotic relationship between Great Northern and the state of Maine. And the Big A defeat must fit into that.''

No one doubts that Great Northern still shapes Maine's political, economic -- and physical -- landscape. The company owns more than 2 million acres, or about twice as much land as the state of Rhode Island.

It already operates 19 dams, most of which create low-cost energy from the Penobscot's powerful current.

It has spawned Millinocket and East Millinocket, two towns that would not exist without the company's mills. And even as recently as 1983, Great Northern flexed its political muscle by getting legislators to exclude its treasured West Branch from a state law giving ``wild,'' or protected, status to many state rivers.

Despite such strength, the company's plans for the Big A dam got knocked out by the one-two punch of state politics and international economics.

Within the state, the momentum shifted against Great Northern last fall when the company backed down on its promise to preserve jobs, according to Jeffrey Thaler, legal counsel for the Maine Audubon Society and the Penobscot Coalition.

Mr. Thaler says the groups had stirred public passion with pleas for the river's unique landlocked salmon fishery and its stunning beauty. They had even crafted economic arguments outlining alternative ways to save the endangered jobs in Millinocket.

But Great Northern buried itself when it objected to the job-preserving condition tacked onto the regulatory permit. ``All of the sudden people said, `Alright, the jig's up,' '' Thaler says.

But Gordon Manuel, a spokesman for Great Northern, says it was foreign competition -- not public opinion or political obstruction -- that swayed the company's decision.

``Our company is facing intense competition on the world market. We have got to modernize. We can't stand still. If we do, we won't be around,'' he says.

To keep up with the streamlined mills across the Canadian border, Great Northern plans to reduce its paper production from 840,000 tons to a core production of 640,000 tons. Originally, Big A was to have generated enough energy to sustain and expand present production.

Though losing the dam and cutting production are major blows to Great Northern, experts agree it is just part of a cycle from which the company will rebound. ``I've always felt that the Great Northern Paper Company owns so much land and has so much invested that it could take almost any reverse in stride,'' says Professor Smith.

But many people wonder about the survival of Millinocket, a town so tied to the lumber and paper industry that even its McDonald's has a woodburning stove.

Local union leader Arthur Owens, who sided with environmentalists in the fight against the dam, says the town could be ``a total disaster area'' -- especially because laid-off workers would have few places to go in economically depressed northern Maine.

But that's not the opinion of other millworkers gathered in the C & J Restaurant, wheresawed-off logs make for a rough-hewn wallpaper. One 23-year veteran insists: ``We'll survive. We always have.''