Lost New England #2: AMPAD
American Pad & Paper (1884–1994)
There was a city called Leominster, and in this city, there was one word; plastic. For the first segment of our Lost New England series over the next two months, we are going to be focusing on the grand paper and plastic companies that once represented the central Massachusetts economy for the better part of 50 years. What we know as plastic products today would not exist without the creative and hard-working minds of these Leominster factories.
You must understand that during this period it was as if the world had discovered a brand new element. You can think of forks, combs, plates, cups, computers. This was “plastic city”, “comb city”, or “flamingo city” depending on who you asked. At the same time, there was the city of Holyoke nicknamed “paper city” and the Maine paper factories in the town of Millinocket known as “magic city” which were paramount in creating the first industrial centers of textbooks and newspapers that would go on to form the first public schools and universities, so that now even the common man could afford books and read the news. Out of this also came the adoption of mass distribution of news in the form of the nation’s first widespread newspapers. It truly was a period of wild west opportunity where everyone and anyone named Bob and Samantha was trying to get their hands on either the plastic or paper industry. Summer nights were about as foul smelling as could be, and the rivers and rivulets were polluted and colored green. However, you could rise within the shop job to foreman or machinist or a place in the office or learn the plastics business and buy a couple of molds of your own. It was this economy that raised an entire generation of New Englanders.
The industry was cradle to grave up until the late 1960s, and then the system began to leak at the seams. There were layoffs more often, not just seasonal. It was in the late 1980s when there was a massive outsourcing from Leominster, and four “powerhouse” companies closed their factories in five years alone. The three main factors were a rise in the cost of electricity in Massachusetts, new environmental and zoning laws that were put into place that made it more difficult for companies to remain profitable, and increased outside competition from foreign labor which was perhaps the largest factor and nail in the coffin to ultimately weaken labor union controlled buildings. By the turn of the century after trade deals such as NAFTA had been passed, the entire plastic and paper industry had moved south of the border or overseas, but at one point in history, it was made right here at home. The National Plastics Center and Museum which opened in 1982 in Leominster forced to close in 2008 for lack of funding and never reopened again, and paper production became frowned upon as a means to clean up our rivers from toxic dyes. Today these sites are now abandoned factories of forgotten dreams. I think it is important that we tell their story and what ultimately led to their demise.
We begin this series by talking about a company that once employed hundreds in the Paper City of Holyoke that existed from 1884 to 1994. A merging of businesses that ultimately became American Pad & Paper, otherwise more commonly known as Ampad is still sold under its name today. Although still in existence, bears no connection to its New England roots. This is the brief story of a once large name.
If you’re a school teacher or remember your childhood, you probably used a product made by this company no matter what part of America you live in. Many don’t know it, but for over 100 years every notebook sold in stores across the country was made in factories in Massachusetts.
This was the second major paper company operating in Holyoke alongside Parsons by local entrepreneur Thomas Holley along with investor Cyrus H. Taber. He did this at first by taking the “waste” pulp and paper material from the Parsons plant dumpster which he was allowed to obtain for free, cut the paper himself, inscribed lines into it and glued into pads, and started selling his product to discount stores. This was essentially the invention of the first legal pad ever to be produced. Some positions at the factory included “product manager”, “director of business development”, “assistant product manager”, “closing operator”, “maintenance supervisor”, “machinists” “millwrights” machine repairmen”, and “plant electricians”. They practically invented the canary-colored legal pads, to the point where by the mid-century they were responsible for sixty percent of legal pads sold. Company officials said psychologists told them a preference for the color yellow is often a sign of an orderly and consistent mind.
In 1889 Holley opened his first store and filled an entire floor on Main Street in Holyoke with his invention. By the early 20th century the product was so popular Holley bought two buildings on Winter and Appleton Street just to store his inventory. It was a huge local favorite that was about to blow up in popularity. However, at this time in the early 20th century, the company only employed 120 people at its original five-story plant in Holyoke. A major expansion was required to keep up with demand.
During WWII the company started to massively expand its operations across the country. They were a generous company as well. Workers were reportedly paid so well, that in December of 1956, it was written in the Boston Globe that 120 employees by a 3 total margin had voted to forego their Christmas present (bonus) from the company and instead have it applied to Hungarian relief. Two-thirds to the International Rescue Committee for Hungary and one-third to Red Cross relief for Hungary. The action of the Holyoke workers was believed to be the first of its kind in the country, and Donald R. Taber, treasurer, and general manager, had high praise for the move.
In 1957 the company announced a new $700,000 115,000 square foot building in Holyoke which expanded their space by 25 percent for production and warehousing. The new two-story building would incorporate the latest ideas in industrial design replacing a five-story structure the company had occupied for about 60 years. This land was given away from Holyoke Water & Power Company as an incentive to bring more business into the city. Practically every school in New England including colleges were customers of their products including the University Of Massachusetts and Harvard. For the upcoming fall semester of 1975, Campus Promotions contracted with American Pad of Holyoke to produce 500,000 copies of a standard spiral-bound notebook which contained ads for some of their largest customers such as Nikon cameras, Landlubber jeans, Jose Cuervo tequila, and Gillette razors. It should be noted that every employee who worked for the company was given shared ownership in stock when they were manufacturing locally, also known as profit sharing practiced by many companies during that time.
There is evidence that by 1976 the company was still growing in size. Dubbed the “future of Holyoke”, American Pad was investing $100,000 in 1976 dollars into new infrastructure as evidenced in a newspaper article from the Transcript-Telegram below.
“A $100,000 investment in the “future of Holyoke was announced today by American Pad & Paper Co. (Ampad) President Robert G. DeCarlo. The company is expanding its Holyoke facilities by about 15 per cent in the Aubin Lyman Street Complex, between the first and second level canals, installing $100,000 worth of new machinery, and will hire approximately 25 skilled workers, according to DeCario. The additional 50,000 square foot plant that has been leased from William Aubin of Amherst, will be fully operational by the end of May, he said. The building is adjacent to the 90,000 square feet already occupied by Ampad, and will expand the company’s local families to 340,000 square feet.” — Transcript Telegram (Dec, 30th, 1976)
By the late 1970s however, the company opened two other plants in Mattoon Illinois, and Salt Lake City, and distribution centers in Atlanta, Chicago, Los Angeles, and Grapevine Texas. This would be a sign of things to come. In 1983 shareholders voted to rename the company Ampad Incorporated as they wanted to expand their operations worldwide, but this would not be a good sign for what was once the paper city of America. It would be in 1986 when Mead purchased the company, which followed two years later when shareholders voted to cut hours on workers and remove company pensions for new employees. This resulted in the United Paperworkers International Union going on strike for the first time. This also followed another strike at their Marion Indiana plant in 1990.
Mead decided to sell the company rather than give in to demands, so in 1991 they gave 80% share to Bain Capital which was an investment group owned by Harvard graduate Mitt Romney who probably used Ampad legal notes when he was a law student. In July of 1992, the Boston Globe reported that the Mead investors chose to shed an estimated 1,000 jobs across the country. This included the sale of their Holyoke office supplies headquarters on Appleton Street known as Ampad to Mitt Romney. Romney embarked on a “roll-up strategy” in which a firm buys up similar companies in the same industry to expand revenues and cut costs. Through Ampad, Bain bought several other office supply makers, borrowing heavily each time. By 1999, Ampad’s debt reached nearly $400 million, up from $11 million in 1993, according to government filings. The result: Ampad couldn’t pay its debts and plunged into bankruptcy.
The True Story of Mitt Romney and Bain Capital
“They asked me if you could talk to Mitt Romney what would you say? But what I said was from the heart.” Said Sharon Alter, a 53 year old divorced mother of three who worked at the Marion plant for 30 years before she was fired in July.” — Boston Globe (Oct 3rd, 1994)
“Bain Capital put $5 million into its purchase of American Pad & Paper and quickly began charging management and other fees. It also made payments to investors. In all, Bain and its investors reaped more than $100 million even though Ampad ended up in bankruptcy, workers lost jobs, and stockholders were left with worthless shares.” — Boston Globe (Jun 26th, 2007)
In July of 1992, the Boston Globe reported that the Mead investors chose to shed an estimated 1,000 jobs across the country. Within one year after a July 4th weekend in 1994, workers in Holyoke and at the Indiana factory showed up to notices of employment termination. When Mitt Romney decided to pull Ampad’s headquarters out of Holyoke the city lost hundreds of jobs and the loss of the last major paper industry in Holyoke. Although he did not start the downfall, Romney’s indirect role that further led to the company’s demise ended up costing him the election to unseat Edward Kennedy in the 1994 United States Senate elections.
On Google Maps, you can see the factory building today sitting in a dilapidated state with broken-out windows and filled with graffiti in a state of disrepair, when just a few decades before it was a powerhouse to the local economy. In an ironic twist, Mitt Romney would later go on to become Governor of Massachusetts from 2003 to 2007, voters seemingly ignoring the damage that was caused to his state years before.
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