Helping the Wood Products Industry Thrive

By Beacon Staff

Another crushing blow was dealt Montana’s economy and 417 hard-working families when Smurfit-Stone Container announced closure of the Frenchtown pulp mill. There have been numerous news stories written about the reasons and the financial impacts on the community, so all of that does not need to be regurgitated. However, one conspicuously absent issue about this and other shutdowns and layoffs is the benefit package each of the 417 people received through their employment, including health care.

You would have to live under a rock in order to be immune from the national hype currently raging over health care reform. Again there is a conspicuously absent equation to this discussion. Why is health care in such a state of disrepair and why are so many individuals doing without? How about the lack of meaningful employment complete with benefits as a contributing cause to the health care woes?

In Montana during the early 1990s there were in the neighborhood of 50 mills and wood products manufacturing facilities operating with over 14,000 employees. Those operations prided themselves on the fact that the wages were above average for Montana workers and benefits such as health insurance were a given for employment.

Fast forward to 2010 where there are still roughly 8,000 mill workers and loggers employed but many with reduced benefits including higher deductibles on health insurance for both the worker and his/her family members.

The reduction in manufacturing of value-added products has hit not just Montana but the nation as a whole and is proving to be the cause of much of the country’s economic woes. The jobs available in the current economy do not offer the same benefits that jobs offered a few years ago did. Of the 1,600 manufacturing jobs lost in Montana last year the bulk came from the wood products sector. The difficulties suffered by the timber community are many and varied, including the housing slump and global markets. However, the trend started well before the current problems as we go back to the 1990s when there were three times the number of mills operating at full capacity than there are now. The downturn for mills beginning then was and still is in direct correlation to the drop in availability of the federal timber supply. Until the issues surrounding lack of supply are addressed by Congress the unfortunate trend will most likely continue and Montana and her citizens will suffer the consequences.

It has long been a puzzle to me as to why so many individuals are intent upon killing the goose that has been laying the golden eggs for decades by eliminating valued-added manufacturing and natural resource jobs. California is a prime example with its now $20-billion deficit mounting every day at an alarming rate.

California has all but driven out its wood products facilities with Draconian state statutes and regulations even on private forestland. Biomass energy plants for awhile looked as though they could help the struggling wood products folks but now they too are hanging on by a thread. When the catastrophic wildfires of the past three years hit and were finally put out at a cost of billions of dollars, there was virtually no one left in the timber industry to pick up the pieces. And yet California imports 70 percent of the wood products it consumes. All of those products could be milled and manufactured right in the state providing desperately needed jobs to lower the 12 percent unemployment rate and putting dollars into the state coffers in the form of corporate and individual income taxes. Does anyone else see something horribly wrong with this picture?

While there is not usually a silver bullet for solutions, it seems to me if businesses, including wood products, were aided in operations by less regulation, lower worker compensation rates, and more incentives to stay in business, there would be a much higher likelihood that those businesses would be available to provide benefits, including health insurance, thus promoting the well-being of the employees.

Society needs to understand the integration of meaningful employment and the benefits that go with it including value-added production of commodities so the economy and our citizens can thrive.

Ellen Simpson is executive vice president of the Montana Wood Products Association.