The June 22 announcement that timber giant Weyerhaeuser Company was closing two mills in Columbia Falls and eliminating 100 positions is a gruesome testament to the flagging timber industry’s struggle to regain footing in the market after decades of decline.
Blaming the closures on the ongoing lack of available log supply, company officials said the decision was difficult but necessary, and denied that it was part of a blueprint for consolidation drawn up when Weyerhaeuser absorbed Plum Creek earlier this year.
But timber executives and forest managers say they are not surprised by the cuts for a host of reasons, including an over-reliance on logging private parcels, a soft market, and the constraints foisted on the beleaguered wood products industry, with the most pointed barbs aimed at a hamstrung National Forest System and the persistent litigation of timber sales, which can stall a project for three to five years.
“Given the short timber supply and the litigation mess, Weyerhaeuser had to make the decision they made and it did not surprise me,” Julia Altemus, executive vice president of the Montana Wood Products Association, which promotes the state’s logging industry, said. “It is unfortunate, and I hope it won’t happen to other mills, but without significant changes in forest management it is always a possibility.”
In Northwest Montana, 80 percent of the forests are federal land, while accounting for just 12 percent of the state’s lumber production.
“When you source 12 percent of your wood from 80 percent of the ownership, there is definitely a problem,” said Chuck Roady, director of F.H. Stoltze Land and Lumber in Columbia Falls. “Private lands represent for 20 percent, so they are bearing a hugely disproportionate share of the timber harvest. It’s only a matter of time before that catches up to you, and that is why the mills are closing.”
Stoltze is no stranger to cutbacks, and in 2014 was forced to reduce production and lay off employees due to the log-supply shortage, the most significant reduction it had incurred in years.
“I am sitting here facing the exact same decisions [as Weyerhaeuser],” Roady said. “We haven’t run at full-throttle since last year, and these mills are not designed to run at half-throttle. It’s just not efficient, but we don’t have the logs. And what’s most frustrating is that we are surrounded by trees. They are everywhere.”
Still, other factors have figured prominently into the industry’s decline statewide and nationally, and forest managers say blaming the mill closures on a shortage of federal timber sales is overly simplistic.
At Plum Creek, an emphasis on liquidating its land as real estate and a legacy of unsustainable harvesting practices combined to create a deficit of available timber.
“Certainly we had indicators that these were not sustainable harvesting operations occurring on Plum Creek lands,” said Bob Harrington, forestry division administrator for the Montana Department of Natural Resources and Conservation. “They were harvesting far in excess of what was sustainable on those landscapes.”
A decade ago, Plum Creek held 1.3 million acres of land in Montana, but as a real estate investment trust, the company also sold or traded more than 500,000 acres for housing, recreation and conservation if it was not productive for timber.
“That change in the land base has definitely impacted the timber availability. It’s not just the federal issue,” said Todd Morgan, director of Forest Industry Research for the University of Montana Bureau of Business and Economic Research.
The company realized significant profits from land sales as it liquidated prime pieces of real estate, which were subdivided for coveted second-home getaways.
Harrington said “a complex sequence of events” combined to stagger the industry, and cautioned that rooting out a single cause or searching for a silver-bullet solution is a fool’s errand.
“Even though the prospect of people losing their jobs is heartbreaking, a lot of us in the profession have seen these indicators for a long time, and we’ve known that at some point, something was going to give,” he said. “It’s heartbreaking, but a lot of us saw this coming.”
Immediately following Weyerhaeuser’s announcement that it was closing two of its mills, conservation groups predictably came under siege for their role in litigating timber sales.
Some were quick to push back against the notion that they should shoulder the blame for the chilling effect on National Forest logging, while others said they were accustomed to being scapegoated for the timber industry’s woes.
Keith Hammer, chair of the Swan View Coalition, said he’s been hearing the same rhetoric for more than 30 years, both as an environmental activist and as a logger.
“Industry tries to paint those of us who are involved in environmental or conservation work as a bunch of granola-crunching know-nothings who can’t find our way around the woods or the industry. And that is not the case,” Hammer said. “A lot of us got involved because we saw a lot of bad stuff firsthand.”
Although lawsuits filed by groups like Swan View Coalition have stalled timber sales while the U.S. Forest Service addresses environmental impacts, they’ve never stopped a sale from eventually moving forward.
“I’ve never known a single timber sale that in the end didn’t go through in some form,” Hammer said. “You get some adjustments made on the most egregious parts of it, but you get the timber sale. Litigation rarely means that a timber sale is dead.”
Other environmental groups said it was disingenuous for Weyerhaeuser to blame a dearth of available timber on federal lands when neither it nor Plum Creek had been actively bidding on federal timber sales.
Neither Plum Creek Timber nor Weyerhaeuser have bid on timber sales in Kootenai National Forest for nearly a decade, said forest Supervisor Chris Savage.
Chip Weber, supervisor of Flathead National Forest, said there have only been two smaller timber sales offered in Flathead forest since Weyerhaeuser bought Plum Creek.
“I do know they have emphasized harvesting off their own lands,” Weber said.
However, Plum Creek and, subsequently, Weyerhaeuser were culling logs from independent loggers, Weber said, some of whom had contracts with the Forest Service.
In the last 40 years, Montana’s timber industry has downsized considerably as wildlife habitat, recreation and other multiple-use considerations have gained management value.
“There has been an awful lot of legislation that effectively cut the size of our suitable timber base and our ability to produce timber,” Weber said.
Lumber production across the state has dropped from a record high of 1.6 billion board feet annually in 1986 to around 600 million last year. The number of sawmills across the state, from small operations to large facilities, has shrunk from 150 facilities to less than 30. The industry employment dropped from 10,695 workers in 1994 to barely 7,000 a year ago.
A witch’s brew of misfortune has cast a spell on Montana’s timber industry, creating a multifaceted problem that was recently compounded by the expiration of the softwood lumber agreement – the Canadian tariff put in place in 2006 to balance out the lopsided endeavor of competing with cheaper Canadian lumber, which was expected to flood the market in the United States.
Morgan said despite the predictions of industry analysts, that scenario hasn’t played out as expected, due in part to the effects beetle infestation has had on Canadian timber stands.
While Morgan did not minimize the role that timber supply has played on the industry’s decline in Montana, he said the recovering construction industry still hasn’t caught up to generate the same level of demand.
At Weyerhaeuser, the closures of its lumber mill and plywood mill are expected to take place in late August or early September.
Employees at the two mills were given 60-day notices at 3 p.m. on June 22, as required by the Workforce Innovation and Opportunities Act. Company brass explained that workers would have the option of applying for positions at its lumber and plywood mills in Kalispell or its medium-density fiberboard plant in Columbia Falls. Those mills could absorb about 130 of the 230 employees affected by the closures, while 100 jobs would be eliminated.
Meanwhile, an additional 100 jobs will disappear when Weyerhaeuser closes its administrative office in Columbia Falls.
Don Leitz, a block-saw operator who has worked at the plywood plant for 28 years, said he was hopeful to find another job with the company, but hope doesn’t relieve the heartburn of being cast into uncertainty.
“You have a job for a lot of years, and it’s a secure feeling,” Leitz said. “And it’s not so secure right now. Plum Creek was good to me for a lot of years. This job supported my family, so I’m going to keep a positive spin on this and hope that it opens some new doors. I’m going to show up to work every day and do my job.”
Ever since the Weyerhaeuser-Plum Creek merger four months ago, mill workers have been anticipating cuts, Leitz said; however, they didn’t expect them to come down the pike this soon.
“We knew it was coming, but we didn’t know it was coming this soon,” he said. “I thought I had a year, so it was a hard thing to hear.”
Roady said laying off mill workers and paring back operations is a gut-wrenching decision for mill operators, but in the context of the current climate of forest management, it’s a reality.
“I hope I don’t die before I see some improvement of how we manage our federal lands,” he said.