Western mills make difficult adiustments

tTt"t rwo-pl-us-yEen collapse in the residential construcI tion market has forced sawmills in the West to make difficult adjustments to stay strong. Most have cut shifts or mothballed facilities, hoping to ride out the storm.

The key to survival has been recognizing the coming challenges and adjusting quickly. "We're heavy to retail, so we identified where the market was heading early on and rightsized to fit," said Steve Schmitt, v.p.-marketing, Stimson Lumber, Portland, Or. "Eighteen months to two years ago, we reduced production by more than 507o. We've also worked with the crews in our mills to enhance productivity and remove obstacles and bottlenecks. We made our moves early on, because the we're the first product put in the home, not the last."

The reductions were implemented in such a way that if the log-to-lumber price ratio improves, Schmitt said Stimson "could add hours at any and all of our facilities."

Plum Creek Timber Co., Seattle, Wa., has closed two sawmills and idled its stud plant in Kalispell, Mt. Operational facilities have cut overhead dramatically, to the point where the same millwrights who operate the machinery also repair it if there's a breakdown.

A goal for Collins Cos., Portland, Or., has been to keep all facilities running, despite having to reduce the workforce. "It's a blessing for us that we are family owned," said Kevin Paldino, v.p.-sales & marketing. "We make decisions for the right reasons and we are very nimble, which isn't always the case with a large, publicly traded company. We are more long-term thinking."

With hard work and creativity, said Paldino, "our manufacturing facilities are producing more footage per man hour on a reduced-shift schedule than when they were running full tilt. Our hardboard plant in Klamath Falls, Or., can now produce almost as much on two shifts, five days a week, as it did when itran 2417 The mills are always looking for ways to cut costs and increase productivity."

Productivity is also up on the sales side, in part thanks to Collins' IT department. Orders can be written on the road from anywhere, even using a hotel's computer. In addition, Paldino said, "everyone carries an iPhone. And when we're out of the office, our business calls are forwarded to us. We can be reached virtually any time, anywhere, so that while the mills may not run 2417, the sales department does."

Other sawmills have adjusted product mixes. Sierra Pacific Industries, Anderson, Ca., is retooling its sawmill in Sonora, Ca., shuttered since 2009, to accept a broader array of log sizes. SPI hopes to restart the mill in May with 130 workers.

Last May, SPI cut a shift at its large-log mill in Quincy, Ca., and restarted Quincy's small-log mill, which had been idle for a year The switch resulted in a net gain of 35 jobs.

"We are in it for the long run," said SPI's Mark Pawlicki. "We anticipate the market will come back."

Trinity River Lumber Co. is preparing to restart its sawmill in Weaverville, Ca., which was destroyed by fire 16 months ago. During the rebuild, Trinity River has been working out of the former Siller Brothers Sound Stud Mill in Anderson, Ca. Weaverville will reopen with up to 70 workers-50 fewer than it had before the fire, but considerably more than the 40 now in Anderson.

"It will take some time to get the bugs out of it totally, and we will not be jumping into two shifts immediately," said general manager Dee Sanders.

Swanson Group, Glendale, Or., was winding down production at its Glendale sawmill at the end of last summer, when a 20-million-bd.-ft., eleventh-hour order from China allowed the facility to fire back up-at least into January. John Stembridge, v.p.-sales & distribution, realizes that export sales aren't a permanent solution. Residential construction will continue to dictate western mills' prosperity. "It's the same (customer) base, only shrinking," he said.

Mills that can hang on until a turnaround should be the stronger for it. Said one lumber manager: "Like many other companies, we were a bit fat from the good times, and this downturn forced us on a harsh diet. In the lons run, we'll be a better competitor for it."

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