- "Chronicles" is made possible by a grant from the Erie Community Foundation, a community assets grant provided by the Erie County Gaming Revenue Authority, support from Spring Hill Senior Living, and the generous support of Thomas B. Hagen.

(bright music) - This is WQLN.

(machines humming) (bright music) - You know, in the early days, they were all taking on multiple roles.

- So we in PA, grow and produce more hardwood lumber than any other state in the US.

- We had to do two steps back to do another step forward.

- Those are the kinds of things that a technical mind has to spend time working on.

- "Your grandfather," he said to me, "would've known how to do that, we're still learning."

- The Hammermill story starts a long, long way from Erie in 19th century Prussia.

The many smaller German states had been united into what we know as the German Empire.

The largest of these states was Prussia, bordering the North and Baltic seas.

After the Austro-Prussian War, a property in Pomerania along the Baltic was offered to a notable statesman for his service.

Not far from the meandering Wipper River, this estate passed into the hands of future German chancellor, Otto von Bismarck.

(dramatic music) - Otto von Bismarck was awarded a sizable amount of money in the mid 1860s in recognition of his efforts to unify the German empire.

A few years before that happened, he purchased an estate in Pomerania in what is now Northern Poland, an estate with tens of thousands of acres of some farmland, but mostly trees.

And wanting to make some lucrative use of that property, he approached Bernhard Behrend and his sons, George and Moritz Behrend, who were paper makers in a nearby city.

- I think it's amazing when you think about all these startups now, but they were a startup back in 1898.

The company grew and progressed, and they brought in employees and look at the impact that that family has had across Erie County, and especially from an educational standpoint.

The family had been engaged in paper making in Germany for several decades with their father Moritz coming to run three paper mills in Germany by the late 1890s.

Two of his sons followed in his footsteps, Ernst and Otto.

And in the early days, they were all taking on multiple roles.

- The Behrend brothers were the beneficiaries of university-level educations in Germany, in mechanical engineering, in chemistry, and in paper making, both the practical experience of working in their father's company from the shop floor up.

And so, they had an understanding of the technology that could be adapted to keep up with the pace of innovation in that industry.

- They had to know the technical side of paper making, but then combining that with appropriate management skills, that, the combination led to their success.

And Ernst was really the brains behind the company and the advancements that they made and overcoming the challenges.

- Ernst Behrend was the president of the company.

He was the driving force in the business side and understood intimately the technical and manufacturing side of the business.

- Dr. Otto Behrend started out with the chemistry background and Otto was the lead chemist and ran the laboratory.

He was the treasurer.

He was the co-vice president.

He was the secretary.

The testing of how to produce pulp and paper was a big contribution in the early days of the Hammermill Paper Company.

- I went to visit Hammermill in my period of graduate business study and felt that I knew enough to ask questions and saw this huge mill roller, about the size of this room in diameter, going quite rapidly.

And there was a middle-aged gentleman with his hand up on the paper as it was being done.

And I asked the then president of Hammermill, "What's happening there?"

He said, "Well, this is something "your grandfather would've liked, "because we have put in this massive new computer.

"We're having trouble getting it "to read out all the elements of the paper "as it's being produced.

"But this paper maker from Germany can tell "in his fingertips what the densities are "that we're trying to accomplish, "and we're trying to get that data into the computer.

"Now, your grandfather," he said to me, "would've known how to do that, we're still learning."

- I could go on and on and talk about paper making, because it was just kind of a nerdy thing to do all the time.

And it was just someone had to be a print expert.

Someone had to be a formation expert, someone else, a quality expert.

And when you come up with new developments, you needed each of those opinions and expertise to get it right.

If you pick up a piece of paper and look through it, if it looks like a really blotchy, cloudy day, that's poor formation.

If you look at it and go, "It just looks overcast," that's beautiful formation.

So the ability to tweak the machine on the wet end so that the fibers lined up so that they didn't combine together too much to form those clouds, it was a very tweaky thing, a little bit of science, a little bit of art.

- Chemistry is an important part of fine paper making.

Just what you can do to those little paper fibers to make them cooperate and make them hold together in something like a copying machine that wants very much to fry them and set them on fire.

Those are the kinds of things that a technical mind has to spend time working on.

- People started writing on things like papyrus, but it was thick, but it worked, but it really wasn't paper.

And then in China, they were making paper out of some wood component and rags and things like that, and it was just a slurry mix that made some more primitive paper and rag continued for a long time to be part of the paper making process.

- That's the predominant method of paper making up until about the 1860s to 1880s.

By the 1880s, you see a lot of companies switching over to wood pulp.

Both hardwoods and softwoods are used for paper.

It just really depends on the type of paper that you want to create.

So you can have anything from cardboard boxes and more industrial, strong, durable types of paper, or you can have paper for your printer, fine writing paper, facial and toilet tissue, it really depends on what you want your end product to be.

Hardwoods are a little higher in cellulose content and lower in lignin, which are the two main building blocks of what a tree is.

Therefore, they make a better writing paper.

They're easier to bleach, because they have less lignin in them.

And this fiber strands in the cellulose are also smaller, so when you're actually trying to knit the paper together, that allows that to a lighter grain, finer writing paper to come out like it does, whereas softwoods make much better industrial paper, so the cardboard, corrugated, that types of stuff.

- So I can back up a little bit, first you cut down the tree, then it would come to the mill, and it would go through debarking drums.

The bark would come off, and those were very noisy, so partly why Hammermill was not located right in the city.

Then after the bark was taken off, it would be put through a chipper.

The chip would then be put into a large crock pot, a pressure cooker with cooking chemicals.

It would break down the lignin, which is the glue that holds the fibers together.

It would come out the end of the cooking process black, so then they would have to rinse off the cooking chemicals.

Those would go one way for recovery into green liquor and then white liquor to be reused.

And the pulp would go through a bleaching process to turn it nice and white and bright, because people don't wanna write on brown paper, like what newsprint would be.

And so after bleaching, it would then go to the paper making process, and there, there would be other things added in to sizing so that when you write on a piece of paper, it doesn't bleed through to the other side, all that stuff, and go onto the paper making machine, drain it, press it, dry it, put it on a roll, and then we go to the converting department, and depending upon the order would be the size of paper sheets that it would be cut into and the same equipment, the Bielomatiks would put it into boxes.

(gentle music) - Processing soft woods was done with either the acidic sulfite process or the basic sulphate process.

Hammermill was ready to try something new.

- They switched to Neutracel and were able to use hardwood instead of the soft wood and have similar strength and excellent opacity formation printing properties.

The challenge with the Neutracel was is that they couldn't recover the chemicals, that was an environmental hazard.

So after years with that, they developed Neutracel 2, which they were able to recover the cooking chemicals from the process and less environmental impact with that.

- So, why Erie of all places?

What was it that drew the Behrends to our city on the lake?

- Ernst Behrend was working for a company called Pusey & Jones, an American manufacturer of paper machinery.

But he also had the opportunity to travel around the country and essentially scout out, evaluate possible sites for a new mill.

Hammerm ühle was in the middle of the Pomeranian woods, many miles from a city.

There were problems with that.

Some of the advantages that Erie had at that time were that relative to Hammerm ühle, it was a city.

- For people in the Erie area, you could be in more of an urban environment and have a good family sustaining job.

- It would not be necessary for the company to build housing for the workers as they had had to do in Germany.

Lake Erie was a potentially limitless source of fresh water.

And then, the timber, soft wood or evergreen trees could be imported at that time from Canada.

- So we in PA, grow and produce more hardwood lumber than any other state in the US, but our forests in Pennsylvania are very unique at this point in terms of their composition.

Hardwood forests are a relative rarity across the world.

Most of the rivers in Pennsylvania, the three major waterways, the Allegheny, the Susquehanna, and the Delaware all flow south away from Erie.

Erie is in its own very small watershed with just a few streams flowing into the lake.

So we're really looking at 1880 and thereafter where transportation of lumber shifts from water transportation to railroad transportation, that markets then really start to open up in Erie.

- And then, of course, there was coal from Western Pennsylvania.

Many people will remember the extensive piles of coal along East Lake Road that bedeviled many a housewives laundry when it was put out to dry.

So all of the raw materials and the labor force were available in Erie, and of course, it was and still is very close to major markets.

- And so, Hammermill came to Erie and found success surprisingly quickly, thanks to its roots back in Prussia.

Like with most new businesses, strong financial backing from investors and family, in this case, was key to getting Hammermill underway in America.

(dramatic music) - The two Behrend brothers were bringing to the United States intellectual assets that would not have been typical at the time for a mill in this country.

And that allowed them to develop a company that could make a profit and employ people exploiting higher value kinds of paper and specialty papers for markets that would not have been available to other companies.

Moritz Behrend, the businessman, invested a million dollars in starting up the Hammermill Paper Company, originally, E. R. Behrend & Company as a subsidiary of the German firm, Varziner Papierfabrik in a wheat field just east of what was then the Erie city line on Hess Avenue.

It was just about that time that Bismarck passed away, but the German firm still owned the Erie mill for about 20 years.

- While Ernst and Otto knew how to do many of the jobs of the plant, they couldn't do it alone.

They had to hire people they could trust to take the same care they could with the paper.

- Because his father had been the superintendent of the Behrend's mill in Germany, my grandfather, Henry Obermanns, he was also knowledgeable about the process and was invited by the Behrend brothers to come here in 1904 and ultimately became superintendent of Hammermill in Erie.

- Their focus on employees and valuing them was big.

It continued till the time that I came to Erie, because there's a lot of talent there, and it was just a very cohesive group, and I think they started that way at the beginning.

- In the 1880s, Chancellor Bismarck began instituting a number of laws that made partial steps toward providing workman's compensation, health insurance, paid leave, and other considerations that were instituted there before they were common practice in this country.

The Behrends grew up in that milieu, and so it was only natural, perhaps essential, that they would begin such practices with Hammermill in Erie.

- One of the things that I was told by so many people when I first started working there is how the Behrends would walk through the mill, and they would know people's names, they would know their families, they demonstrated that they cared by all the extra things, that they added, an athletics association, and just that that was the Hammermill way, and it built into the culture that really continued to when I started.

- Mr. Behrend wanted to trust people, and in turn, that would bring out the better nature in many of the employees.

Mr. Behrend had German shepherd dogs.

(dramatic music continues) When Ernst Behrend would decide to go out into the mill to see how things were going, he would send the dogs into the mill ahead of him.

The workers, seeing that, would know that the boss was coming, and they would have an opportunity to look sharp, be busy, even more so than they already were when Mr. Behrend came by.

That was intentional on Mr. Behrend's part.

He wanted to catch people at their best.

- Work kept on progressing and Hammermill kept growing.

As the 20th century wore on, though, it was war on the horizon.

The Great War began and the German ties of Hammermill brought scrutiny, even before the US entered the war.

- The Behrends and other American investors needed to Americanize Hammermill in Erie, or it would likely have been seized as enemy property when the United States entered World War I, - The United States Government informed grandfather that he could not have any German investors in his plant because of the impending difficulty with that country.

So they arranged to pay for the shares that were held in Germany, and because of the difficulty of currency transactions, it had to be done in gold.

So there was some arrangement made for a submarine to come from Germany to New York Harbor and deliver the certificates in return for a payment in gold for these certificates, and that's how Hammermill at that point became 100% US owned company.

- During World War I, it was necessary for the United States Government to raise money to pay for the war effort to send our troops overseas.

And Mr. Behrend and other community leaders became Four Minute Men.

They would give little pep talks about why you should buy war bonds.

(gentle music) During the war in 1916, Ernst Behrend was a naturalized citizen by that time, but his father was a German citizen.

Moritz had just died, think about that.

He was just like every other immigrant in Erie, who, when they got the telegram that a family member in Europe had died, could not go over there to mourn and bury their loved ones.

- But what became of the original Hammermill, "die Hammerm ühle"?

- The German firm continued as one of the largest paper mills in Germany and was, as we understand it, implicated in attempting to counterfeit American and British currency during World War II, (dramatic music) because its machines were geared to make fine paper, just like the machines in Erie.

In 1945, the Russian Army dismantled the paper machines at Hammerm ühle.

The shell of the factory lay dormant for some years until the Polish government installed leather works there, a company now called KEGAR that continues making very fine leather materials for high-end uses.

- Hammermill continued with their own high-end products and making innovations towards that end.

- Because of their watermarking, they had had such a brand recognition, and they were such a big player in the commercial printing.

- The Behrends found a way through their technical education in in Europe and examining other innovations to make fine quality writing paper from trees.

And in order to give that even higher value for Hammermill, the Behrends invented a watermarking process then customers would know that this paper that they were using came from Hammermill.

- A typical watermark is a wire roll on top of the fourdrinier that the water's draining through, and it has that logo on it that impresses into it and moves the fibers around.

The interesting thing about Hammermill is theirs was not a watermark, it was actually a press mark, so it was in the second part of the paper machine, and by going between two rubber rolls with the watermark on it, moved the fibers and caused the watermark that way, so it's actually a press mark.

(upbeat whistling) Walt Disney did his sketches, the motion sketches where you flip the pages, and you see Mickey walking that he did the Mickey Mouse sketches on Hammermill Bond.

So it wasn't like he had a patent on it, but you could tell if it was a fake or not, because if it wasn't on Hammermill Bond, it wasn't authentic.

- With innovation comes learning experiences too.

- We had a development.

It was originally supposed to be called Hammermill Pizazz.

Marketing materials already made.

We had little clicky pens, had to get rid of it all, because it was a patented name.

They changed to Hammermill BriteHue.

This is what we started with.

That's supposed to be a fluorescent color, but it kind of looks like mustard, right?

So this is what we ultimately wound up with.

So this is fluorescent green, and this is fluorescent green.

You can see the huge color difference.

So, a little bit of a fail, which happens a lot of times in product development.

We had to do two steps back to do another step forward, but they, again, innovative, persevered through, surround yourself by talent, and it became a successful product.

- Hammermill was never the largest paper company in the United States, but it was one of the more profitable because it attracted customers and had a very high proportion of its market in the areas where it chose to do business.

And as a result, Hammermill grew by leaps and bounds in the 1960s and 70s producing paper for Xerox and for other copiers, and that created a lot of jobs and a lot of value for the Erie community.

- Hammermill expanded out from Erie and new plants were built and bought in Michigan, Ohio, New York, Massachusetts, Alabama, California, and more.

But not everything was positive.

Social and economic challenges almost got the best of Hammermill on several occasions.

The 1980s brought an era of unregulated stock market manipulation, which almost brought an end to the company.

- The last thing an acquirer in their right mind would want to do would be close the mills.

They would build up the mills, as far as I'm concerned, as an analyst or whatever you want to call it, in securities business, I can't conceive of anyone that would buy...

If you bought a good house, would you burn it down?

- An article in today's editions of "The Wall Street Journal" indicates that a New York based investment group has taken over control of a large block of Hammermill's common stock, and may indeed be seeking to control the entire company.

"The Journal" quotes Carl C. Icahn, a New York investor who says his companies have nearly 10% of Hammermill's common stock.

Icahn and his people say they will probably seek a seat on the Hammermill Board of Directors.

One paper industry analyst is quoted by "The Journal" as saying that "Hammermill's present management "wants to remain independent," and quote, "If they go down, "they'll do it kicking and screaming," unquote.

That squares with what one Hammermill source told us today.

And that is that if it comes down to a stock fight, Icahn and his people will be taking on the whole Hammermill family, a fight Hammermill expects to win.

- Hammermill began seeking a suitor to buy it out, to stave off the possibility that it might be broken up and actually closed and everyone lose their jobs.

The company management settled on International Paper as the one that they thought would be the best fit for Hammermill.

- The challenge with paper making was that all of the machines were sized for offset, and so when the cut size became the 8-1/2 x 11 or A4, it just made the Erie machines non-competitive as it made more business sense, I guess, to build a machine in another country or another area of the United States than it was to start all over where the existing machines were.

- Consolidations, mergers, buyouts, and shutdowns loomed over the Rust Belt and the rest of the country too.

International Paper made the decision to close Hammermill Erie 104 years after it opened.

Hundreds on hundreds lost their careers in Erie's paper manufacturing powerhouse.

The Hammermill name carried on though.

- When International Paper took over, I think they did a really smart thing by not saying International Paper and sub Hammermill, they kept the brand upfront, and that was a good marketing move, because there was so much commitment from trusting the quality.

Same thing today with Sylvamo.

If you look at the website, it's Hammermill, and it's not, "We're Sylvamo and here's Hammermill."

It's, "Here's Hammermill, oh yeah, we're owned by Sylvamo."

- Hammermill and the Behrends came here bringing things that America and Erie didn't have.

They brought their technical education.

Their father brought foreign investment to create what became a Fortune 500 company, employing a couple thousand people locally in what had been a wheat field.

It brought other people with technical education and provided jobs for thousands of others who were able to make good lives for their families.

It was and continues to be an immigrant success story.

We are a reflection of our roots but have transcended them.

- They were part of the foundation of the Erie economy and that people came here and had good paying jobs, and they may have had a change after Hammermill left, but we continue on as a city.

I have strong friendships still to this day, from coworkers from Hammermill, some of the management and then hourly people as well.

And the stories that we would share just about living in Erie and things that happened at the mill, it just made everybody feel like family.

- When was the last time you thought about how something was made, the sewists who made your clothes, the assembly line workers who put together your phone, the cooks who made your Wednesday night takeout?

Not every business tries to give you its best, but there was a time when one paper company tried to do just that.

Next time you've got a piece of paper in hand, remember the craftsmanship needed to take it from tree to pulp to quality paper and the people who made it happen.

(dramatic music continues) - "Chronicles" is made possible by a grant from the Erie Community Foundation, a community assets grant provided by the Erie County Gaming Revenue Authority, support from Spring Hill Senior Living and the generous support of Thomas B. Hagen.

(bright music) - We question and learn.