More mill closures due to log shortages

I AWSUITS and appeals. Log- L ging restrictions. Log shortages. Leaping prices. And, increasingly, layoffs and closures, as virtually across the board major lumber manufacturers are taking drastic steps to survive today and brace for tomorrow.

Recently announced shutdowns at RSG Forest Products, WTD Industries, Weyerhaeuser and other large employers are adding to the thousands already put out ofwork by the mounting problems in acquiring logs from federal timberlands.

RSG Forest Products, Kalama, Wa., has temporarily shut down all four of its Douglas fir plants: RSG Lumber Co., Kalama; Olympic F-orest Products, Mist, Or.; Estacada Lumber Co., Estacada, Or., and its Molalla division, Molalla, Or. Increasingly more expensive and difficult to obtain timbers have left the company with a large inventory of finished products.

The wholesale closure amounts to a loss of about 3 million bf. per day, and the company is evaluating restart on a day-to-day basis, says sales manager Greg Mobley. "There's not much else you can do when you're down to zero production of 2x4s," he says.

WTD Industries, Portland, Or., has also devised a severe restructuring plan. The company will curtail operations at three mills, defer startup of two recently acquired Oregon plants, and write down presently inactive assets.

Scheduled for closure were a chip and veneer recovery mill in Goshen, Or.; a dimension lumber mill in Junction City, Or., and a stud mill in Valley, Wa. lI conditions improve, the mills may be reopened. WTD

Story at a Glance

Log shortages drive prices up & mills under. closure and layoffs strike large and small mills alike.

has also indefinitely postponed startup of a stud mill in Cottage Grove, Or., and a veneer milt in Yoncalla, Or.

Planned for write down are previously closed mills in Eugene and Union, Or., and Olympia, Wa. They are said to be relatively small volume producers of lumber cut from large, more expensive logs and will either be sold or liquidated in the coming months. WTD's investment in a Port Westward, Or., pulp mill project will also be written down.

For the first fiscal year in company history, earnings will not exceed those ofthe prior year. "For the past five months, lumber and chip markets have not supported escalating market prices for logs, except in the most efficient mills," said WTD president Bruce L. Engel. "Concerns for future log supplies generated by preservationist pressures may extend the log price escalation. WTD will meet this challenge with reorganization of mill operations not readily able to contribute to profit margins."

Meanwhile, Weyerhaeuser Co. has reduced the workforce at its Klamath Falls, Or., plant from approximately 1,300 to 910. The cutback results from discontinuation of two of four large log "headrigs" (which had been steadily operating for over 60 years), plus related reductions in downstream manufacturing, roundwood operations and support functions.

The move begins a transition to focusing on the smaller logs from Weyerhaeuser's tree farms, according to general manager Dale Williams.

"Federal logs that have amounted to one-third of our timber supply are either unavailable because of restrictions and set asides for small businesses, or are too high in price to manufacture successfully," he said. "A recent big change is intense buying pressure from west side firms in Medford and Roseburg that are short of federal timber from their traditional areas."

Similarly, Eel River Sawmills, Inc., Fortuna, Ca., has delivered 60 to 90 day layoff notices to employees of its Alton, Ca., sawmill. "We're not mothballing the plant or dismantling it," says controller Tony Titus. "Decisions will be made after the initiatives in November."

William Ford, sales manager, DAW Forest Products Co. and W-l Forest Products, L.P., Lake Oswego, Or., reports W-l's Peshastin, Wa.. mill was recently shuttered, while its central Oregon plywood plant is down from three shifts to two. Gilchrist Timber Co.. Gilchrist. Or., is down from two to one shift at its ponderosa/lodgepole pine sawmill since it is harvesting only off its own land. The closely held company is also having its holdings evaluated, not that the company is looking to be sold, "but with the current situation, maybe it wouldn't be such a bad idea," says director of sales Will Ernst.

SDS Lumber Co., Bingen, Wa., is also running at half-speed, after closing and dismantling its Cascade Products mill two years ago and shuttering its Mount Adams Timber Products mill in November.

"We're seeing a 300/o curtailment off last year and production is off 50% from two years ago, while our overhead has basically remained the same," sales manager Leslie Campbell says. "Ours is a voluntary curtailment. We've taken a one year log supply and turned it into a two year supply."

In recent months, companies including Louisiana-Pacific, Willamette Industries, Hampton Lumber Sales, Roseburg Forest Products and Taylor Lumber & Treating Co. have also attributed closures and layoffs to current or anticipated log shortages. $ee The Merchant, March 1990, p. 4s)

"And you can thank your Sierra Club, your Wilderness Society, your Audubon Society when toilet paper costs $10 a roll and you can't get office paper or computer paper," fumed Don V. Berry, controller at Chiloquin Forest Products Inc., Chiloquin, Or. "ln the name of owls, squirrels and woodpeckers do we extinct men and women?"

Chiloquin recently closed its main mill, but hopes to resume operations at a small log site by summer if it can find some logs.

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