Cloquet's history in the wood and timber industries runs deep. Just ask Marshall Johnson, the 72-year old mayor of Scanlon, a tiny town right next to Cloquet. He worked in the industry for 47 years. 

"I've had two grandfathers that worked for the mills," he said. "My uncle worked for the mills. I and two of my brothers worked for the mills."

And now one of his three daughters works at the giant Sappi paper mill in town, operating the same paper machine he used to run. 

For more than a century, the paper mill, the matchstick plant, and a third factory that makes ceiling tiles have provided hundreds of good-paying jobs in this small city of 12,000 people, just 20 miles west of Duluth. 

They're all here because of the St. Louis River and proximity to the north woods. In the late 1800s giant white pines were cut in the heart of northern Minnesota's timber lands and floated downstream to Cloquet.

"And this would be the logical place for the logs to come floating down the river, and for people to build sawmills, so that's really how the city of Cloquet got started," said Rachael Martin, executive director of the Carleton County historical society, who assembled an exhibit called Wood City Smokestacks a couple years ago.

"One of the striking things about Cloquet, you can see these huge smokestacks, especially in the wintertime, when it's so cold, plumes of this white water vapor, outlining itself on the bright blue skies," she said.

But the industry's impact on Cloquet is greater than it's skyline, or in the wages and taxes it pays, Johnson said. The workers themselves also make a difference.

"They've always been involved in contributing to the welfare of the city, he said. "They're involved in the school board, they're involved in the hospital board, they're involved in United Way."

In the 1950s, he said, mill workers could opt to have money deducted from their paychecks to help build a new hospital. In return, labor and management had seats on the hospital board. 

That history and community are why it was such a big blow to Cloquet when the news came last month that the Diamond Match factory is closing.

"There's a lot of concern, a lot of emotion," said Steve Petoletti, president of the United Steel Workers Local 970 union. After initially being told the plant would remain open four to six months, Petoletti said the union has received official word the plant will now close between July 28 and Aug. 11. 

"And as the days get closer," he said, "you can feel a little more emotion."

New Jersey-based Newell Brands recently sold the Diamond Match brand. But the new owner, Royal Oak Enterprises, didn't want the Cloquet factory. Eighty-five employees will lose their jobs. 

Over the past 10 years, jobs in wood product manufacturing in Minnesota have declined by more than 30 percent. Paper mill jobs have been cut by more than 20 percent.

Against the tide of those trends, Cloquet remains optimistic. 

Across the street from the match factory, a steady stream of trucks haul logs to the Sappi mill, the largest paper mill in the state. 

But the plant doesn't just make paper anymore. Four years ago Sappi converted its mill to make a product called specialized cellulose, used in everything from textiles like rayon, to grated cheese, even cellphone screens.

"That was about a $170 million, $180 million investment," said the mill's managing director Mike Schultz. "You don't see investments like that in our industry, particularly in North America very much anymore."

With the paper market in decline, Schultz said Sappi realized it needed to diversify. The mill is now entering new markets in the paper industry, making higher-end packaging paper, gift cards, even hotel keys. 

That diversification gives Schultz confidence the mill can continue to thrive in Cloquet. But Sappi, too, has had to shed jobs. 

"I'll give you a point of reference," he said. "In 2002, when Sappi acquired the mill, we had about 1,050 employees. And today we're at about 685. If anything I feel like we are a little too lean here. But it really does come down to being competitive." 

The other major wood products company in Cloquet is United States Gypsum, or USG, which makes ceiling tiles. That factory has also cut jobs over the years, but it still employs more than 300 people.