The Crumbling Paper Industry: UPM’s Ettringen Closure Signals a Broader Economic Shift
A third of the workforce in Ettringen, Bavaria, faces unemployment. That stark statistic underscores a quiet crisis unfolding across Europe: the rapid decline of the graphic paper industry. The recent closure of UPM’s Ettringen plant, ending 125 years of paper production and impacting 235 employees, isn’t an isolated incident; it’s a symptom of a fundamental shift in how we consume information and a warning sign for communities reliant on traditional manufacturing.
The Digitization Disruption and the Shrinking Paper Market
The root cause of UPM’s decision, and the broader industry woes, is no secret: digitization. Demand for graphic papers – those used in newspapers, magazines, and commercial printing – has plummeted. According to the German paper industry association, production of these papers has been halved since 2015, falling from 8.6 million tons annually to just 4.1 million tons in 2024. This isn’t simply a case of evolving consumer preferences; it’s a tectonic shift in information delivery, accelerated by the proliferation of digital devices and online content.
While UPM reported profits of 463 million euros last year, plant manager Wolfgang Ohnesorg rightly points out that profitability doesn’t guarantee viability in a declining market. The company is strategically consolidating its resources, focusing on areas with future growth potential. This highlights a crucial point: even profitable businesses must adapt to changing market realities or risk obsolescence.
Severance Disputes and the “Social Cold” of Modern Restructuring
Beyond the economic impact, the Ettringen closure has ignited a labor dispute. Employees are protesting what they deem inadequate severance packages, significantly lower than those offered during previous UPM factory closures. The IG BCE union has sharply criticized the company, labeling the situation a display of “social cold,” offering only half a month’s salary per year of employment and limited benefits.
This disparity raises critical questions about corporate social responsibility in an era of rapid restructuring. While companies must prioritize financial health, the ethical implications of leaving long-term employees with insufficient support cannot be ignored. The case, now before the Munich State Labor Court, could set a precedent for future closures and influence the standards for employee compensation during industry transitions.
Beyond Ettringen: Regional Economic Fallout and the Need for Diversification
The closure’s impact extends far beyond UPM’s employees. The 3,500-resident community of Ettringen faces a significant economic blow, with roughly a third of its workforce losing their jobs. Suppliers and local businesses are also bracing for hardship. This underscores the vulnerability of single-industry towns and the importance of economic diversification.
Mayor Robert Sturm’s shock reflects a growing concern among local leaders facing similar challenges. Communities reliant on industries susceptible to disruption – whether it’s manufacturing, fossil fuels, or retail – must proactively invest in retraining programs, attract new businesses, and foster innovation to build resilient economies.
The Future of Paper: Niche Markets and Sustainable Solutions
While the era of mass-produced graphic paper is waning, the paper industry isn’t destined for complete extinction. Opportunities remain in specialized niches, such as packaging (particularly sustainable alternatives to plastic), specialty papers for industrial applications, and high-quality printing for luxury goods.
However, capitalizing on these opportunities requires significant investment in research and development, a commitment to sustainable practices, and a willingness to embrace innovation. Companies like UPM are already exploring these avenues, but the transition won’t be seamless. The focus must shift from volume to value, prioritizing quality, sustainability, and specialized applications. Two Sides provides valuable information on the sustainability of paper products.
Retraining and the Skills Gap
The story of Stefan Fendt, a former UPM employee hoping to retrain as a curative education nurse, highlights a critical challenge: the skills gap. Workers displaced by industry closures need access to affordable and effective retraining programs that equip them with the skills demanded by emerging industries. Government initiatives, private sector partnerships, and community colleges all have a role to play in bridging this gap and ensuring a just transition for affected workers.
The UPM closure in Ettringen is a stark reminder that economic disruption is inevitable. The key to navigating this disruption lies in proactive planning, strategic investment, and a commitment to supporting both businesses and workers through periods of change. What steps is your community taking to prepare for the future of work?
