<B>Plans for Pulp Mill May be in Jeopardy </B>

Unable to reach a labor agreement with union negotiators, the Jubilee Pulp Co.'s plans to restart Kimberly-Clark Corp.'s idle pulp mill in Mobile and recreate 160 jobs appear to be in jeopardy.

Jubilee, a group of private investors based in Greenville, S.C., expected to complete the purchase of the mill by this week and proceed with a $100 million renovation. But negotiations over the final piece of the deal - a labor contract with the Paper, Allied-Industrial, Chemical and Energy Workers (PACE) union - have broken off. Jubilee officials now say they're considering taking the project elsewhere.

"It looks like (the project) is off," said Tim Brett, a spokesman for Jubilee. "The union broke off negotiations, and we don't have any other alternatives at this point. We have to start looking at other communities."

On Oct. 20, Jubilee Chief Executive Officer Richard Greer said that the labor negotiations were progressing amicably and on schedule. But the talks broke down this week when PACE officials pressed for the addition of certain benefits to an informal agreement struck between the two sides, Brett said.

"While we didn't have a contract, we felt like we had reached an understanding that we simply had to finalize," Brett said. "But then (PACE) came back and said they were unwilling to accept the agreement we'd made. They made some demands that are just way overboard if we're going to run a viable business."

Brett declined to specify the items in dispute but said Jubilee made numerous concessions to the union, including generous pension and health benefits in addition to an average wage of more than $20 per hour.

"They're asking for some things that just aren't possible," he said. "I don't know about Mobile, but in Greenville (S.C.), $20 an hour is pretty good money. It's just disappointing because Jubilee has invested considerable time and money getting to this point, and for the union to come back at the 11th hour like this ... it's just very disappointing and puzzling."

Chuck Spence, a PACE negotiator, said the union's discussions with Jubilee "are at a real critical stage" and referred all questions to PACE Region 5 Vice President Don Langham of Mobile. Langham could not be reached for comment Thursday.

The mill was shut down in 1998 after Kimberly-Clark said it could import cheaper, better pulp from South America. At peak production, the mill employed about 300 workers.

Jubilee planned to reopen the pulp mill at half its former production capacity by this summer, employing about 160 workers.

The pulp mill was obtained by Mobile Energy Services Co. through a lawsuit filed against Kimberly-Clark soon after the shutdown was completed. The mill was MESC's biggest customer for electricity and steam as well as its primary supplier for the wood waste it burned for fuel.

The shutdown plunged MESC into bankruptcy, and in its lawsuit the company accused Kimberly-Clark of failing to make a reasonable effort to sell the mill.

Kimberly-Clark settled the lawsuit in January, agreeing to pay $53 million to terminate its contract and giving MESC an option to buy the mill. In return, the energy company promised to sell electricity and steam to the tissue mill at market rates. Mobile Register