….True enough, the mill in Wickliffe, the county seat, would have been staring down the barrel with or without the involvement of first Cerberus Capital Management and then Apollo Global Management. They came in, as private-equity firms often do, as business was on the skids, aiming for a turnaround.
Opened in 1970 by Westvaco Corp., the mill produced coated paper for magazines and glossy marketing inserts—a profitable enterprise in the pre-internet age. Times changed. Former employees said worries about the future began when Westvaco merged with Mead Corp. in 2001 and ratcheted up when Cerberus acquired the coated-paper unit in a $2.3 billion leveraged buyout in 2005…..
….To be sure, the mill’s idling can’t be held solely responsible for the county’s credit and debt woes. Other employers have disappeared in recent years. Within a 50-mile radius of Wickliffe, two tire plants and a Honeywell International Inc. factory that converted uranium ore into fuel for nuclear plants shuttered, and a government-run uranium enrichment facility is winding down.
The death of the paper mill hurt the most, with about 350 jobs with generous benefits lost. Locals blame Wall Street investors for accelerating what might haven been the inevitable (there’s still debate about that in Wickliffe), echoing detractors of the private-equity model that has a bumpy turnaround track record but that has been attracting record amounts from investors because they promise juicy returns in a world of ultra-low interest rates. The $3 trillion industry pulled in a record $453 billion last year.
Officials at Apollo and Cerberus declined to comment for this story….